US and UK Impose Sanctions on Russian Aluminium, Copper, and Nickel
The United States and the United Kingdom have enacted stringent sanctions on Russian metals, banning imports and trading of aluminium, copper, and nickel on major Western exchanges like the Chicago Mercantile Exchange (CME) and the London Metal Exchange (LME). These measures, effective for metals issued after April 13, aim to sever the flow of these commodities from Russia to Western markets, potentially driving significant shifts in global metal trading dynamics.
The U.S. Treasury Department's latest sanctions are a response to ongoing geopolitical tensions, reinforcing existing trade barriers that have already curtailed Russian metal imports to negligible levels compared to previous years. For instance, U.S. imports of Russian aluminium plummeted from $612 million in 2021 to just $105,000 in 2024, with similar declines observed in nickel and copper imports.
Interestingly, the sanctions do not extend to palladium and platinum, metals for which the U.S. has continued to procure substantial quantities from Russia, notably from Nornickel. In 2023, Russian palladium and platinum exports to North and South America generated RUB 114 billion, accounting for 10% of Nornickel’s total revenue.
The impact of these sanctions is anticipated to be most profound on the trading floors of Western exchanges. The LME alone holds about 400,000 tonnes of Russian metals, including significant reserves of aluminium, copper, and nickel. In response to the sanctions, the LME has advised against accepting new shipments of Russian metals post-April 13, a move that could lead to discounted over-the-counter transactions involving these metals.
Analysts predict these sanctions could shift trading activities towards Asian markets, particularly the Shanghai Exchange, which has been less affected by geopolitical restrictions and could offer an alternative hub for metal trades previously centered in London and Chicago.
These developments signal a tightening of the Western financial blockade against Russian economic interests, which could lead to logistical challenges, yet possibly benefit non-Russian producers like Alcoa by potentially inflating global aluminium prices. This is seen by some market observers as a strategic move to bolster American metal producers struggling with low market prices.
