Pittsburgh aluminium pioneer Alcoa Corporation came out in favor of UC Rusal’s suggestion last week for the London Metal Exchange to publish the origin of all its aluminium and other metal stock in their warehouses around the world.
The LME has faced calls for months by Alcoa and others to prohibit the sale of Russian aluminium on its platform since February, when Russian troops invaded Ukraine. Though Russia has been the target of sanctions since then, neither Russian aluminium nor Rusal has yet come under sanction themselves.
In a statement emailed to Reuters earlier this week, Alcoa detailed its reasons for agreeing with Rusal’s proposal.
“We support proposals that would provide market participants with more data, including monthly reports that would disclose the origin of all metal stocks on warrant.”
The LME has already agreed to publish regular reports on the amount of Russian metals in its warehouses starting next year. However, Rusal says it prefers that the Exchange detail the origin of all its metals, which is a sentiment with which Alcoa agrees.
“The important issue at present is to ensure that the market has increased visibility on Russian-origin aluminum, which will allow both the LME and market participants to carefully monitor this situation.”
The LME is still developing the format of its monthly reports and assures stakeholders that the final product will be responsive to their needs.
Last month Rusal came under fire due to allegations that it offloaded a substantial amount of aluminium to LME warehouses, which other market participants opposed due to the prospect of flooding the aluminium markets and depressing the price. Rusal has denied the allegations, and data from the LME indicates that 17.7 percent of its current holdings originated from Rusal’s smelters.
Alcoa and other traders continue to call for banning trade of Russian aluminium on the LME. Alcoa has also approached the United States government seeking an embargo on Russian metals.
