The London Metal Exchange this week confirmed that its holdings of Russian aluminium rose as expected in January to a total of 42 percent of the aluminium stock in its warehouses.
According to a report just released by the LME, of the 152,841 metric tons of primary aluminium in its warehouses, 93,750 metric tons had Russian smelters as its origin. Fully 94 percent of the LME’s copper holdings, or 54,950 metric tons, and 16 percent, or 42,774 metric tons, of its nickel holdings originated from the Russian Federation as well.
The LME justified its holdings as being reflective of the market’s desires.
“The LME’s conclusion (based on market feedback) that Russian metal continues to be consumed is supported by data on the outflow of Russian metal from LME warehouses.”
“The LME believes that the evolution of Russian stocks is in-line with the market trends as anticipated,” the organization continued.
The majority of Russian aluminium in LME warehouses were located in Asia, with none residing in United States warehouses, opting to avoid American warehouses “in the context of market speculation around potential U.S. tariffs on Russian aluminium.”
The LME’s caution is warranted according to US officials, who said that the government is considering raising import tariffs on Russian aluminium to 200 percent in a bid to pressure the Russian government out of Ukraine.
The LME weighed the idea of banning Russian aluminium from its warehouses last year due to the government’s invasion of Ukraine a year ago but ultimately opted against the move because much of the aluminium buying sector plans to continue purchasing Russian aluminium through at least this year.
Levels of Russian aluminium, copper, and nickel all rose above October totals in December, but aluminium and nickel still remained well below record high totals in the month.