LME rejects Russian metal ban

LME rejects Russian metal ban

The London Metals Exchange has refused to introduce a ban on Russian metal despite concerns over the impact of Russian material.

Blue View

In early October, the LME published a discussion paper on Russian metal, with the aim of soliciting feedback on the ongoing acceptability of Russian metal for good delivery on the Exchange following Russia’s invasion of Ukraine.  The discussion period was open for three weeks, closing on 28th October.  It laid out three potential paths forward – namely, maintaining the status quo, prohibiting the warranting of new Russian metal from LME warehouses, or the imposition of thresholds or similar limits on the warranting of new Russian metal.  Last week, the LME confirmed that the status quo would continue. 

In its response, the LME noted that it has responsibilities to ensure an “ongoing orderly market” but that at present it had no evidence to suggest the market was disorderly given that a material portion of the market is still planning to accept Russian metal in 2023.  The response document set out that one circumstance in which an orderly market could be threatened would be if Russian metal were not sanctioned by governments but were rejected by a sufficient number of global consumers, with the twin results that its value in the market became materially depressed, and large quantities of Russian metal flowed into LME warehouses. In this circumstance, the LME price could be artificially lowered, and orderly market conditions threatened.  

It was the fact that the LME received a number of expressions of concern in respect of the potential for Russian metal to be so broadly “self-sanctioned” by consumers in 2023 that the orderliness of the market could be compromised that it published the Discussion Paper.

  • 14 Nov 2022
  • Russia
  • Aluminium
  • Cobalt
  • Nickel
  • Copper
  • Zinc
  • Molybdenum
  • Tin

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