Metals Spike on LME After Russian Metal Hit by US, UK Sanctions.

Aluminum and nickel prices on the London Metal Exchange (LME) have surged following new US and UK sanctions that prohibit the delivery of Russian supplies produced after midnight on Friday. The sanctions aim to limit President Vladimir Putin's military funding and have introduced uncertainties into the metals markets, which have already been affected by Russia's invasion of Ukraine. Traders believe that removing one of the largest producers from the market will drive prices higher, although there are concerns about the potential influx of old Russian metal onto the LME. Russia remains an important producer, accounting for a significant portion of global nickel, aluminum, and copper supply. The LME has implemented daily limits on price increases since a previous nickel short squeeze and sanctions on United Co Rusal International PJSC. The escalation of hostilities in the Middle East could also contribute to market volatility. The sanctions divide the market into three categories: new Russian metal, old Russian metal, and non-Russian metal. The LME has confirmed that old Russian metal can still be delivered, but it will require evidence that the metal does not violate sanctions. This approach may reignite a debate about whether Russian metal should be banned altogether to protect the LME's role as the home of global benchmark prices. Russian metal already accounts for a significant portion of LME aluminum, copper, and nickel stocks. Traders anticipate a wave of Russian material being dumped onto the exchange due to concerns about future restrictions. This influx of supply could push spot prices down relative to forward contracts, indicating a [Extracted from the article]