On Friday, April 1, the London Metal Exchange had halted the shipment of some Russian-produced metals to its permitted warehouse in the United Kingdom, although no Russian metals are currently stored in its facilities. The decision was taken in response to Russia’s invasion of Ukraine earlier this year.
The exchange, which is run by Hong Kong Exchanges and Clearing Ltd, said in a statement that there was a substantial possibility that anybody acquiring such metal from British storage would face exorbitant extra expenses. One of the extra levies mentioned by the LME is the 35 per cent tax imposed two weeks ago on copper, lead, basic aluminium, and aluminium alloy.
Some LME members have urged for Russian metals to be banned from the exchange's system, but the world's largest and oldest metals trading exchange has declared it would not go beyond British government sanctions on Russia.
Currently, Rusal's aluminium and Norilsk's nickel may only enter LME warehouses if the existing owner bought them before March 25. The notice specifically mentioned three other Russian manufacturers of lead and aluminium alloys. However, industry insiders claim that Rusal does not transmit its metals to the LME in the first place, so the ban may be a solution in search of a problem.
“Neither Norilsk Nickel nor Rusal send any of their metal to UK warehouses,” said an industry source.
Hull and Liverpool are the only two permitted LME warehouse locations in the UK, however, they contain relatively little metal. According to LME statistics, none of the four metals being halted is presently kept in British LME warehouses.
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