Move away from Russian metal saps Indian, Chinese stocks in LME system

Credit: LME

Traders and consumers scrambling for alternatives to Russian aluminum sparked a drop in available stocks of Indian-origin metal in London Metal Exchange-approved warehouses to 18% of the total in June from more than 50% in January.

Monday’s LME data also showed non-Russian origin copper accounting for a declining share of available stocks, with the proportion of on-warrant copper inventories sourced from China falling to 8% in June from 40% in May.

The percentages calculated by Reuters refer to on-warrant stocks, or material not earmarked for delivering out. Warrants are title documents conferring ownership of metal.

Higher percentages of on-warrant Russian aluminum in LME-registered warehouses – at 80% compared with 41% in January and 68% in May – suggest consumers and traders are avoiding Russian metal even though it is not sanctioned.

“We closely monitor the levels and flow of Russian metal through our physical network,” the LME said in response to a request for comment.

“We note that all metals of Russian origin continue to be consumed by a broad section of the market, and will remain vigilant in respect of this matter.”

Russian aluminum stocks on LME warrant fell to 218,025 metric tons in June from 263,125 in May, data published by the world’s oldest exchange and largest metals market showed.

While also not directly targeted, other Russian metals were similarly showing signs of suffering the knock-on effects of the western sanctions imposed on Russia since its 2022 invasion of Ukraine.

As total LME copper inventories saw large cancellations in June, the proportion of Russian-origin stocks climbed to 66% from 33%, the LME said. The actual amount of Russian copper in the inventories fell to 22,750 metric tons from 29,600.

Russian nickel made up 22% of available stocks, or 7,962 metric tons, against 20% in May.

(By Polina Devitt and Pratima Desai; Editing by Ed Osmond and Jan Harvey)


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