LME Bans Placement of Russian Nickel in UK Warehouses

The London Metal Exchange this week banned the placement of Russian nickel in warehouses in the UK, unless the warehouse management proves that the metal was taken out of Russia before July 20.

The move follows a decision in April to ban the placement of other Russian metals, including copper, lead, primary aluminum and aluminum alloys, in UK warehouses.

The decision also came after the British government imposed additional duties of 35% on those metals as part of a package of sanctions against Russia that now apply to nickel.

The LME said it currently has no Russian nickel in its warehouses.

The exchange said in a statement that there is a significant risk that obtaining such metal from warehouses in the UK could entail high additional costs.

“Therefore, with regard to nickel produced in Russia, there is a significant risk of an imbalance between the price of the traded metal and the price of the underlying physical metal,” the report says. "This move does not prohibit the trading of Russian nickel on the stock exchange."

There are two LME warehouses in the UK, in Hull and Liverpool.

Russia's largest nickel producer Norilsk Nickel did not respond to Callanish's request for comment.

The company increased nickel production in the first half of the year by 26% compared to the same period last year and amounted to almost 100 thousand tons. This year the company plans to produce 205-215 thousand tons of nickel per year.

Norilsk Nickel's consolidated revenue in the first half of 2022 remained unchanged at $9 billion amid a decline in total metal sales due to disruptions in logistics.

The nickel market surplus is expected to increase to 75,000 t in 2022 and further to 150,000 t in 2023. However, this will be mainly driven by low-grade nickel as NPI's new capacity comes online in Indonesia, along with increased production. nickel chemicals.

The company is also ready to discuss a merger between Norilsk Nickel and Russian aluminum producer Rusal.