Commodities
LME Bans New Russian Metal, But Braces for a Flood of Old Stock
- US, UK announced new sanctions on Russian metals late Friday
- LME CEO acknowledges risk that old metal is dumped on exchange
Rolls of aluminum foil at the Sayanal foil mill in Sayanogorsk, Russia.
Source: Bloomberg
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The London Metal Exchange banned delivery of new Russian metal following sanctions imposed by the US and UK, but left the door open for a wave of old stocks to hit the market and raise the risk of pricing dislocations.
No Russian metal produced from April 13 onwards will be eligible for delivery to the LME, which plays a central role in the global metals world as the home of benchmark prices for everything from aluminum to zinc. Russian metal produced prior to Saturday will still be accepted, as long as the parties delivering it can demonstrate to the LME’s satisfaction that the metal is not subject to the sanctions.