Russian metal ban proposed

Agencies and staff reporter

The copper committee of the London Metal Exchange, a subsidiary of the Hong Kong Exchanges and Clearing (0388), recommended banning new supplies of Russian metal from the bourse, according to people familiar with the matter, a move which would send shock waves through the market if implemented.

The exchange said it currently doesn't plan to take any action that goes beyond the scope of the Russian sanctions, such as placing restrictions on the circulation of metal produced by Russia in the LME system.

Russia is the world's seventh-largest copper producer, accounting for about 4 percent of global production. But its role on the LME is more significant, since it is the third-largest exporter of refined copper metal.

However, banning Russian metal could have an even more seismic impact in the LME's nickel and aluminum markets, where Russian producers Norilsk Nickel and United Company Rusal (0486) supply a large proportion of the tradable brands.

The LME has previously said that it would "respond swiftly" if any producer of metal registered on the exchange were to be placed under sanctions.

So far, while some buyers of metals are avoiding Russian supplies, the United States and Europe have not placed sanctions on major Russian metal producers.

Last week, LME said in a notice that it will keep hiking its daily price limit for nickel trading to 15 percent from 12 percent, which will be effective today.

Nickel resumed trading on the LME in a fixed price range for the first time last Wednesday, after extreme volatility triggered a rare market shutdown.