Aluminum, Nickel, Copper: LME ban on Russian metal creates buying opportunity? By Investing.com

The US and UK have imposed restrictions on the trading of new Russian aluminum, copper and nickel on the LME and on the Chicago Mercantile
Exchange.

The restrictions apply to metal produced after April 12th as pre-existing stocks are exempt from these sanctions. The sanctions are intended to limit Russia’s revenue from metal exports produced by companies such as Rusal and Nornickel.

The US Treasury Department and the British government have banned the London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME) from accepting any new production of aluminum, copper, or nickel from Russia.

Reacting to the news, analysts at Jefferies said they expect the ban to have “the most significant impact on aluminum prices,” but they believe it is also “likely to drive prices of copper and nickel higher.”

“This should be most positive for shares of aluminum producers such as Alcoa (NYSE:),” added Jefferies.

Meanwhile, analysts said the net impact is positive for LME-traded primary aluminum, copper and nickel flat prices as it shifts the prior discount for new Russian units of these metals off-exchange and creates vulnerability to near-dated spread tightness through future inventory cancellations.

“However, the measures are not meaningfully targeting physical trade of units outside the LME warehouse system, which should moderate the scale of the price impact,” they wrote. “We think the measures are intended to (and will) drive deeper discounts for new Russian metal production versus global prices by constraining options for their sale and finance.”

The US and UK have imposed restrictions on the trading of new Russian aluminum, copper and nickel on the LME and on the Chicago Mercantile
Exchange.

The restrictions apply to metal produced after April 12th as pre-existing stocks are exempt from these sanctions. The sanctions are intended to limit Russia’s revenue from metal exports produced by companies such as Rusal and Nornickel.

The US Treasury Department and the British government have banned the London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME) from accepting any new production of aluminum, copper, or nickel from Russia.

Reacting to the news, analysts at Jefferies said they expect the ban to have “the most significant impact on aluminum prices,” but they believe it is also “likely to drive prices of copper and nickel higher.”

“This should be most positive for shares of aluminum producers such as Alcoa (NYSE:),” added Jefferies.

Meanwhile, analysts said the net impact is positive for LME-traded primary aluminum, copper and nickel flat prices as it shifts the prior discount for new Russian units of these metals off-exchange and creates vulnerability to near-dated spread tightness through future inventory cancellations.

“However, the measures are not meaningfully targeting physical trade of units outside the LME warehouse system, which should moderate the scale of the price impact,” they wrote. “We think the measures are intended to (and will) drive deeper discounts for new Russian metal production versus global prices by constraining options for their sale and finance.”