According to our European report, there has been a rush to sign contracts with the two major mining and smelting companies in Russia following the London Metal Exchange's decision not to forbid Russian metal from being traded on its platform and stored at its warehouses.
{alcircleadd}Some buyers had postponed concluding annual supply agreements with MMC Norilsk Nickel PJSC and United Co. Rusal International PJSC due to the LME's deliberations over whether to outlaw Russian metal. However, contracts with both businesses are now getting finalised.
The Russian aluminium giant, Rusal, stated that sales have increased after the LME's announcement. Brian Hesse, the owner and CEO of PerenniAL, the region's sole distributor of Rusal, said that aluminium sales in North America might decline by 4% to 5% due to some clients' reluctance to purchase Russian metal. However, contracts in the region are being resolved.
Since the LME ruling, Nornickel, the world's top producer of refined nickel, has also noticed an increase in sales activity, according to a source familiar with the matter who asked to remain anonymous since the firm doesn't comment on contracts.
On November 11, 2022, the LME declared that it would pursue accepting deliveries of Russian metal per its contracts without further government sanctions, disappointing those major producers who had pushed for action. They had advocated that if certain consumers refrained from purchasing Russian metal, it might be dumped on the LME and skew exchange prices.
Hesse said, “Russian aluminium is still flowing. Very few customers are saying we don’t want Russian metal. We have some customers who have made that moral decision, but overall, there’s a demand for the metal.”
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