On Friday Oct. 28, ISRI submitted comments to the London Metal Exchange (LME) regarding the LME’s Oct. 6 Discussion Paper on Russian Metal to potentially ban the trade of Russian metals on the LME including aluminum, nickel, and copper.
Suspending Russian metals from being traded on the LME would be among the sanctions imposed on Russia since the Feb. 24 invasion of Ukraine. According to a statement, the LME issued a paper to ask for views on banning Russian metals, but no final decision has been reached.
ISRI’s letter to LME CEO Matthew Chamberlain, notes ISRI members depend on the LME and other commodity exchanges “to provide market transparency and help mitigate the risks associated with metal processing, trading, brokering, and consumption.”
According to the letter, ISRI members have reported significant primary and secondary metal market disruptions resulting from the war in Ukraine. Recyclers also expressed ethical concerns that trading Russian metals may directly or indirectly finance the conflict.
ISRI members are also concerned that continued listing of Russian metal brands and the flow of Russian stocks into LME warehouses “will substantially increase the risks of creating disorderly or unfair market conditions.”
The association and its members expressed support for the combined efforts among commodity exchanges, national and international government agencies, market participants, and other stakeholders to ensure that Russian metal shipments don’t disrupt terminal and physical market conditions around the world.
ISRI’s Nonferrous Division expressed support for “Option C,” suspending the warranting of Russian metal in LME warehouses globally, in the list of options proposed in the LME Discussion paper. The division also favors “Option C1” in which the suspension would be applied immediately and for all Russian metal, regardless of when it was produced.
“LME’s handling of Russian metal is very important to our members and the international markets,” says Bret Biggers, ISRI senior economist. “We hold out hope that the LME makes the correct decisions, keeping market open, efficient, and fair.”