LME takes first step towards possible Russian metal ban
LME is launching a discussion paper that marks the first step towards a potential ban on new supplies of Russian metal. While launching a discussion paper does not mean the LME has made any decisions about what it will do, the move does mark a shift in approach. The exchange had previously said it did not plan to take any action outside the scope of sanctions, which had earlier, for the most part, left large Russian metal producers untouched.
Going forward, any move by the LME to block Russian supplier could have a significant impact on the global metal market as Russia is a major producer of aluminium. Rusal, the world's largest aluminium producer outside China, accounts for ~6% of global aluminium supplies. Yesterday, aluminium prices on the LME witnessed an uptick of ~3.4% and are currently hovering at ~US$2200/tonne. The uptick in aluminum prices augurs well for domestic aluminum players such as Hindalco.