SEATTLE (Scrap Monster): The London Metal Exchange (LME) has issued a discussion paper on Russian metal, calling for market feedback on possible routes forward on restricting the inflow of unwanted Russian metal into its stocks, which in turn is feared to lead to creation of unfair market.
The exchange has been closely monitoring the developments and has not resorted to additional self-led actions. The percentage of Russian metal, when matched with other jurisdiction metals has remained more or less stable and comparatively low. However, the percentage for copper hit peaks of almost 80 % in May and August this year, recording wide fluctuations as well.
The discussion paper outlines three potential courses of action by LME. The first option is to maintain the current position. As a second possibility, the LME plans to introduce thresholds for warranted Russian metals, so as to suspend further deliveries upon Russian metals accounting for a specified percentage of stock on warrant. The third and final option is to suspend the warranting of Russian metal in LME warehouses across the globe, which for sure will provide market certainty, albeit leading to market disruption in the short term.
The market participants are required to provide feedback before 28th October, 2022.