LME copper committee recommends banning Russian metal

The London Metal Exchange’s (LME) copper committee has recommended banning new supplies of Russian metal from the exchange, according to people familiar with the matter, a move that, if implemented, would send a market shock.

The committee, which only plays an advisory role in the LMEvoted overwhelmingly on Friday in favor of recommend that the exchange not allow further deliveries of Russian copper into its warehouses, the people said, asking not to be identified because the discussion was not public.

The exchange noted that it is closely monitoring developments related to Russian sanctions, but currently does not plan to take any independent action.such as the imposition of restrictions on the movement of metal produced by Russia in the LME system.

“The impact of taking such measures would not be limited solely to the LME business, but would extend to all those who participate in the global market”the stock exchange said in a statement. “Our priority is to maintain an orderly market for the benefit of all market participants and therefore we will keep this decision under constant review as the situation evolves.”

The LME He declined to comment on the copper committee’s discussions.

The LME has previously said that “would respond quickly” if any listed metal producer were subject to sanctions. So far, though, while some metal buyers are avoiding Russian supplies, United States and Europe they have not imposed sanctions on major Russian metals producers.

Russia it is the seventh largest producer of copper in the world and represents about 4% of world production. But his role in the London Metal Exchange is more significant, since it is the third largest exporter of refined copper, the form in which it is delivered on the exchange, after Chile and Japan.

Metal from Russian producers such as MMC Norilsk, Nickel PJSC and Ural Mining and Metallurgical Co OJSC have historically accounted for a significant portion of the copper in LME holdings.

The global copper market is already tight, with stocks on exchanges near a 16-year low. Prices hit an all-time high of $10,845 a tonne last week, but since then they have fallen back a 6%.