How a Ban on Russia’s Mining Giants Could Shake the Metals World – by Jack Farchy (Bloomberg News – October 8, 2022)

(Bloomberg) — A possible ban on Russian supplies by the London Metal Exchange would be a seismic event for the metals industry, cutting some of the world’s biggest companies off from the main global marketplace.

The exchange has yet to make a decision, but on Thursday launched a formal three-week discussion process on the possibility of banning Russian metal, potentially as soon as next month.

In practice, a ban would simply mean that metal from Russia — which accounts for about 9% of global nickel production, 5% of aluminum and 4% of copper — could no longer be delivered into any warehouses around the world in the LME network, which store metal used to deliver against futures contracts when they expire.

But the debate, and potential fallout, provide a stark case study of how deeply the LME is intertwined with all corners of the physical metals industry. Despite being a private company owned by Hong Kong Exchanges & Clearing Ltd., the exchange’s decisions have far-reaching consequences for the way in which metal is priced and traded globally.

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