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LME upholds Russian metals ban, views differ
- China Aluminium Network
- Post Time: 2022/11/18
- Click Amount: 969
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【Aluminum Road Network】
The London Metal Exchange (LME) has announced that it will continue to accept Russian metals as premium delivery for its industrial metals contracts, at least for now.
The company's decision was based on the fact that "it is likely that further tonnes of Russian metal will be secured - if not immediately - in the LME's physical network."
This poses the risk of LME pricing shifting from global benchmarks to Russian benchmarks, creating a disconnect between paper and physical markets.
With no formal sanctions imposed by the government on Russian aluminum, copper and nickel, it all depends on how many companies choose not to use Russian metals in their 2023 supply contracts.
Many countries will self-sanction. But many don't. A London Metal Exchange (LME) discussion paper on the acceptability of Russian metals shows just how divided the global steel industry is at the moment on the issue.
This apparent divergence leaves HKEx with no choice but to take a wait-and-see approach.
split in the middle
The LME received 42 written responses to its discussion report, 11 from traders and banks and 11 from producers.
Many companies are responding after taking stock of customer intentions for the next year. Industry associations are also joining the debate, meaning feedback comes from a broad cross-section of the supply chain.
Opinion was almost divided, with 22 wanting no change and 17 calling for an immediate suspension. Two agencies backed the threshold for buying Russian metals, arguing the option was too complicated, while one abstained. Source:
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