The London Metal Exchange (LME) is launching a discussion paper on whether and under what circumstances to ban new supplies of metals such as aluminum, nickel and copper from Russia, people familiar with the matter said on Thursday.
The release of the discussion paper does not mean the LME has made any decision on what it will do, but the move marks a shift in approach, the report said. The LME has previously said it does not intend to take any action outside the scope of the sanctions.
"What was discussed was the possibility of banning new supplies," the source said, adding that trying to ban Russian-produced metal already in LME warehouses "would be crazy."
Another source said the LME could not ban imports of Russian metal without imposing sanctions on Russian metal-producing companies.
On the same day, the LME issued a statement saying it prioritized "orderly markets" and would continue to take necessary actions to ensure market stability in response to sanctions.
Since the Russian-Ukrainian conflict, Western countries have imposed a series of sanctions on Russia. Although there have been many rumors before that, the LME will ban the supply of new Russian metals, and the LME Copper Industry Committee also recommends banning the import of Russian metals. But so far, there have been no restrictions on buying Russian metal.
However, recently, the balance has begun to tilt towards the end of blocking Russian supply, and it is reported that the LME Aluminum Industry Committee has also begun to support this move.
As the world's second largest electrolytic aluminum producer, Russia's production capacity accounts for 6% of the world's. In addition, Russia is also the world's major exporter of aluminum, nickel, palladium and platinum. If the LME does issue this ban, there is no doubt that it will cause a huge shock in the metal market.
