Banning Russian aluminium would create uncertainty about LME’s role -Rusal
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LONDON (Reuters) – Banning Rusal’s metal will fuel volatility in the London Metal Exchange’s aluminium contracts and create uncertainty about the exchange’s role in the metals industry, the Russian aluminium giant said in a letter seen by Reuters.
Last week, the world’s largest and oldest market for trading metals, said it was considering a consultation on whether Russian metal should continue to be traded and stored in its system.
The letter addressed to “partners” said that if there is a consultation, Rusal will highlight potential impacts such as disruption of the aluminium supply chain due to “potential change of regional delivery dynamics”.
Rusal, the world’s largest aluminium producer outside China, is expected to account for 6% of global supplies of the metal this year.
Excluding Rusal’s metal could mean “increasing market volatility due to restrictions on the pool of physical liquidity on the LME,” the letter emailed to “partners” on Oct. 5 said.
(A ban would) create uncertainty around the role of the LME in the market due to departing from applicable laws, thus making the exchange less attractive to all participants.
This, Rusal said, would create liquidity issues and risk management problems for all segments of the aluminium industry.
We can confirm categorically there are no plans to do so, as our focus remains on executing our current business, business secured for 2023 and business in finalisation,” the letter said.
In addition, Rusal also notes the alarmist views expressed by other interested parties that also contain unfounded statements that we regard as being harmful to maintaining an orderly market.”
Rusal said in a separate statement on its website that its sales book is solid, and the company has no need to deliver metal to LME warehouses.
(Reporting by Pratima Desai and Polina Devitt; editing by David Evans and Bernadette Baum)
Uma Rajagopal has been managing the posting of content for multiple platforms since 2021, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune. Her role ensures that content is published accurately and efficiently across these diverse publications.
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