LONDON: The London Metal Exchange (LME) is considering a consultation on whether Russian metal such as aluminium, nickel and copper should continue to be traded and stored in its system, the exchange said on Thursday.
The LME issued a statement after three sources familiar with the matter told Reuters the exchange was planning to discuss banning new deliveries of Russian metal so its warehouses cannot be used to offload hard-to-sell stock.
Western countries have sanctioned Russian banks and wealthy individuals connected to President Vladimir Putin since Russia’s invasion of Ukraine, but so far there are no restrictions on buying Russian metal.
The LME, the world’s oldest and largest market for industrial metals, said no final decision had been taken on whether to issue a discussion paper to ask for views on Russian metal, but that it was under consideration.
“A discussion paper could also lay out potential options which could be pursued on the basis of market feedback gathered, including the option to take no action,” Chief Executive Matthew Chamberlain said in the statement.
The issue is topical because of current negotiations for 2023 annual supply deals, he added.
The sources said there was some concern that Russian aluminium producer Rusal would not be able to sell its metal and would deliver it to registered warehouses of the 145-year-old metal exchange.
“The discussions are about the possibility of banning new deliveries,” one of the sources said, adding that trying to ban metal already in LME warehouses that had been produced by Rusal “would be madness”.
Another source said the LME could not ban Russian metal without sanctions on the companies that produced them.