LME releases notice after UK and US take action targeting Russian metals

The London Metal Exchange on Saturday set out measures it is taking to comply with new U.S. and UK sanctions that prohibit exchanges from accepting new aluminum, copper and nickel produced by Russia and bar the import of the metals into the two countries. The LME said it recognized that a consequence of the amended sanctions package announced on Friday may be a degree of market uncertainty.

The London Metal Exchange on Saturday set out measures it is taking to comply with new U.S. and UK sanctions that prohibit exchanges from accepting new aluminum, copper and nickel produced by Russia and bar the import of the metals into the two countries.

The LME said it recognized that a consequence of the amended sanctions package announced on Friday may be a degree of market uncertainty. Russia is a major producer of aluminum, copper and nickel. The metal exchange said it will impose an immediate suspension on the warranting of Russian metal produced on or after April 13.

"LME and LME Clear are taking appropriate steps to enable continued participation in the daily settlement process by members and clients," it said in a notice. However, it said Russian metals produced before April 13 can be warranted by the metal owner and can be acquired by LME Clear, and by UK members and clients.

The recent action by Washington and London is aimed at disrupting Russian export revenue as Moscow continues with its full-scale invasion of Ukraine, which has killed or wounded tens of thousands and reduced cities to rubble. On Friday, a UK official said that London expected any market disruption to stabilize quickly and that the government had consulted with colleagues in the U.S., the LME, the Bank of England and the Financial Conduct Authority to minimize any possible disruption.

Both the British and U.S. measures will exempt the existing stock of Russian metal on these global exchanges so they can still be traded and withdrawn to minimize the risk to market stability, the British government said in a statement. The high share of Russian-origin metal in LME inventories has been a concern for some producers, who compete with Russia's Rusal, and some Western consumers who have avoided Russian metal since Moscow's invasion of Ukraine in 2022.

Britain banned the import of base metals from Russia in December and said it would extend the prohibition to related ancillary services when it could be done in concert with international partners.

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