Released April 30, 2024 | GALWAY, IRELAND
en
Written by Martin Lynch, European News
Editor for Industrial Info (Galway, Ireland)--The world's largest and oldest forum for trading metals, London Metals Exchange (LME) (London), has banned trading in Russian metal produced on or after April 13 to comply with new U.K. and U.S. sanctions imposed for Russia's invasion of Ukraine.
The new sanctions are designed to restrict revenues for Russia through its major metals companies like aluminum major Rusal (Moscow, Russia) and nickel, palladium and copper giant Nornickel (Moscow, Russia). They join other fuel, energy, industrial and financial sanctions that are designed to curb money that Russia can spend to fund its war in Ukraine. The move increases pressure on the European Union (EU) to follow suit. The sale of existing Russian-sourced stockpiles will not be affected in order to maintain market stability.
The LME, along with the Chicago Mercantile Exchange (CME) (Chicago, Illinois), will no longer trade new aluminum, copper and nickel produced by Russia. Together, they are the world's two largest metal exchanges and set global benchmark prices for the trade of base metals. Metals are Russia's largest export commodity after energy, though their value has been decreasing since Russia's invasion of Ukraine, according to the U.K. government. In 2022 they were valued at US$25 billion, dropping to US$15 billion in 2023 due to the efforts of the G7 and allies to curtail the market. Jeremy Hunt, U.K. Chancellor of the Exchequer, said: "Disabling Putin's capacity to wage his illegal war in Ukraine is better achieved when we act alongside our allies. Thanks to Britain's leadership in this area, our decisive action with the U.S. to jointly ban Russian metals from the two largest exchanges will prevent the Kremlin funneling more cash into its war machine."
Janet L. Yellen, U.S. Secretary of the Treasury added: "Our new prohibitions on key metals, in coordination with our partners in the United Kingdom, will continue to target the revenue Russia can earn to continue its brutal war against Ukraine. By taking this action in a targeted and responsible manner, we will reduce Russia's earnings while protecting our partners and allies from unwanted spillover effects."
According to information from consultancy CRU Group, Russia accounts for roughly 6% of the world's aluminum, 5% of nickel and 4% of copper. The EU has been reluctant to impose bans on key minerals and metals for fear of upsetting global commodity prices and undermining its own industrial sector. The move by the U.K. and the U.S. adds to growing pressure on the Union from some of its own Member Countries to ban metals imports from Russia. Last year, it imported around 500,000 metric tons of aluminum for use in a variety of sectors including transport, construction and packaging. It is estimated that the European Union aluminum imports are worth 2.3 billion euros (US$2.5 billion) to Russia per year.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The new sanctions are designed to restrict revenues for Russia through its major metals companies like aluminum major Rusal (Moscow, Russia) and nickel, palladium and copper giant Nornickel (Moscow, Russia). They join other fuel, energy, industrial and financial sanctions that are designed to curb money that Russia can spend to fund its war in Ukraine. The move increases pressure on the European Union (EU) to follow suit. The sale of existing Russian-sourced stockpiles will not be affected in order to maintain market stability.
The LME, along with the Chicago Mercantile Exchange (CME) (Chicago, Illinois), will no longer trade new aluminum, copper and nickel produced by Russia. Together, they are the world's two largest metal exchanges and set global benchmark prices for the trade of base metals. Metals are Russia's largest export commodity after energy, though their value has been decreasing since Russia's invasion of Ukraine, according to the U.K. government. In 2022 they were valued at US$25 billion, dropping to US$15 billion in 2023 due to the efforts of the G7 and allies to curtail the market. Jeremy Hunt, U.K. Chancellor of the Exchequer, said: "Disabling Putin's capacity to wage his illegal war in Ukraine is better achieved when we act alongside our allies. Thanks to Britain's leadership in this area, our decisive action with the U.S. to jointly ban Russian metals from the two largest exchanges will prevent the Kremlin funneling more cash into its war machine."
Janet L. Yellen, U.S. Secretary of the Treasury added: "Our new prohibitions on key metals, in coordination with our partners in the United Kingdom, will continue to target the revenue Russia can earn to continue its brutal war against Ukraine. By taking this action in a targeted and responsible manner, we will reduce Russia's earnings while protecting our partners and allies from unwanted spillover effects."
According to information from consultancy CRU Group, Russia accounts for roughly 6% of the world's aluminum, 5% of nickel and 4% of copper. The EU has been reluctant to impose bans on key minerals and metals for fear of upsetting global commodity prices and undermining its own industrial sector. The move by the U.K. and the U.S. adds to growing pressure on the Union from some of its own Member Countries to ban metals imports from Russia. Last year, it imported around 500,000 metric tons of aluminum for use in a variety of sectors including transport, construction and packaging. It is estimated that the European Union aluminum imports are worth 2.3 billion euros (US$2.5 billion) to Russia per year.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
