The LME Will Not Ban Nornickel's Metal Because Russian Companies Are Not Subject To British Sanctions

Three people familiar with the matter said the LME had told some of its committee members that it would not ban Nornickel's metal from its systems because the company was not subject to UK sanctions, although Vladimir Potanin, chief executive, was.

Metals industry sources fear that the ban on Nornickel will once again destabilise the LME nickel market. Disorderly trading on March 8 halted nickel trading for more than a week, with all trading cancelled that day.

If sanctions were imposed on Nornickel, the exchange would have to suspend its metals trading. The LME banned Rusal's aluminium when the US Treasury imposed sanctions on the Russian aluminium giant in 2018.

"They are not doing anything at this stage, they are within UK government guidelines," one of the sources said.

Since Russia's invasion of Ukraine, Britain and its Western Allies have imposed sanctions on The Russian elite, banks and strategic industries -- but so far not on purchases of Russian metal.

The LME said on Friday it was continuing to review UK sanctions imposed in June on Mr Potanin, known as Russia's "nickel king".

“我们已经评估制裁的细节n and what it could mean for the LME, its participants and the Norilsk brand," it said. "This process is ongoing and we will update the market once we have more clarity."

Nornickel is a major producer of nickel and cobalt, both key materials in electric car batteries. It also produces copper valued for its conductive properties. All three were allowed to be delivered under LME contracts.

The LME declined to say how much Nornickel metal was in the LME warrants - a legal document that gives the holder the right to own the metal.

Russia supplies about 10 per cent of the world's nickel, 6 per cent of aluminium and about 3.5 per cent of copper. A ban on Russian metals could lead to shortages and fresh price spikes at a time of high global inflation.

镍的价格rising since the start of the year because of strong demand and falling inventories. Russia's invasion of Ukraine on February 24th provided further impetus.

Disorderly trading, triggered by China's Qingshan Holdings and others cutting short positions, surged to a record above $100,000 a tonne on March 8, causing the LME to halt trading for more than a week.

The exchange also cancelled all nickel Trading on March 8, for which it is being sued by Elliott Associates, a US hedge fund, and Jane Street Global Trading.