(Bloomberg) — Last month, 13 copper-industry representatives at the London Metal Exchange were asked whether Russian metal should be blocked from its warehouses. Ten of them said “yes.” But when advisory groups for nickel and aluminum discussed the same question, the general consensus was “no.”
The LME, which is the ultimate decision-maker, says it won’t take action that goes beyond government sanctions — which, so far, have left most of the metals industry untouched.
But the behind-closed-doors discussions reflect a wider angst over whether to keep buying from Russia, as the industry weighs the stigma from the war against its own commercial interests — and the fact that vital metals like aluminum and copper were in short supply even before the invasion of Ukraine.
For now, Russian metal is largely still flowing to the world’s factories and building sites. Many traders and fabricators who buy from Russian companies are tied in to pre-existing purchase deals that can extend over years. And commodities merchants have a well-earned reputation as buyers and financiers of last resort when others have long backed away.
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