US ban on Russian metals ‘cuts both ways’ – Kremlin
New Western sanctions against Russian metals are a weapon that cuts both ways, Kremlin spokesman Dmitry Peskov has said. The US and UK have targeted Russian-origin aluminum, copper, and nickel, aiming to reduce Moscow’s export revenues.
The “illegal” restrictions introduced last week will backfire on the countries that imposed them, Peskov claimed on Monday. He noted there has been a “certain destabilization” on the metals market following the ban, referring to a rally on a leading commodity exchange earlier the same day.
Washington banned the import of Russian-origin aluminum, copper, and nickel into the US on Friday, and has coordinated with the UK to crack down on global trade in these metals.
The decision affects aluminum, copper, and nickel produced in Russia after April 13, 2024, and the world’s leading commodity exchanges – the London Metal Exchange (LME) and Chicago Mercantile Exchange (CME) – are obliged to prohibit their trade.
Aluminum jumped as much as 9.4% on the LME on Monday, the most since the current form of the contract was launched in 1987, according to Bloomberg. Nickel rose as much as 8.8%.
The rally is being fueled by “worries that the sanctions will reduce Russian flows to Western markets,” the outlet reported. The new restrictions “inject major uncertainties” into metals markets that have already been reshaped since the start of Russia’s military operation in Ukraine and the Western sanctions campaign against Moscow, it added.
The LME confirmed to Bloomberg on Saturday that “old” Russian aluminum, namely metal produced before April 13, 2024, will continue to be delivered.
As of March 2024, the share of Russian aluminum in the LME warehouse system was 91%, while the share of Russian copper stood at 62% and nickel at 36%, according to LME calculations.
Russia currently accounts for 6% of the global nickel supply, 5% of aluminum, and 4% of copper. According to Forbes, most analysts agree that the new sanctions will lead to an increase in Russian metal supplies to China.
