- The London Metal Exchange is talking to governments about blocking Russian deliveries, its CEO told Bloomberg.
- An LME ban could have a big impact, as Russia is a key supplier in the global metals trade.
- Some metal prices have surged as Russia's invasion of Ukraine and related sanctions spur supply fears.
The London Metal Exchange is debating whether to block Russian metal deliveries to its warehouses and is in discussions with governments about a ban, its chief executive told Bloomberg.
"We obviously are deeply concerned about the situation in Ukraine, and we want to make sure that the LME can't be part of financing any type of atrocity of that nature," Matthew Chamberlain said in a video interview released Tuesday.
Chamberlain said any decisions will depend on government policy on sanctions. He noted Russian metal is not currently sanctioned, and so is allowed in the warehouse network, but did not dismiss a possible change in the situation.
"We are absolutely working with government to communicate the concerns of the market, and we'll see where that goes," he said.
A ban on Russian supplies could have a big impact on metals like copper, nickel, and aluminum, as the country is a key force in the global metals trade.
"If we ban metals from our warehouses, we're not just making a decision about our business, we're making a decision on behalf of the whole market," Chamberlain said.
Russia's war with Ukraine triggered sanctions from the US and its allies, partly with the aim of squeezing the country's ability to trade by cutting it off from the financial system. That, added to the risk Russia could decide to retaliate by holding back its exports, has spurred fears about a disruption to supply.
Those fears have rattled commodity markets and prompted sharp movements in metal prices, notably in nickel. Russia is the world's biggest exporter of palladium, the second-largest of platinum and the third-largest nickel producer.
The 145-year-old LME has come under intense criticism over chaos in the nickel market as prices soared.
The exchange halted nickel trading on March 9 for the first time since 1988, and canceled $3.9 billion worth of trades, after a massive short squeeze drove nickel prices to $100,000 per metric ton within hours. It reopened trading the next week and imposed upper and lower trading limits to stabilize prices.
On Monday, nickel dropped 15% to $31,380 per metric ton, hitting its limit down trading range for the third straight session on the LME. The moves came even after the exchange widened the range after the first time the limit was hit.