Posted on 19 Aug 2022
The London Metal Exchange this week banned the placement of Russian nickel in warehouses in the United Kingdom, unless the warehouse management can prove that the metal was taken out of Russia before 20 July.
The move follows a decision in April to ban the placement of other Russian metals - including copper, lead, primary aluminium and aluminium alloy - in British warehouses.
The decision comes also after the British government imposed additional duties of 35% on those metals as part of a package of sanctions against Russia that have now extended to nickel.
LME stated that there is currently no Russian nickel in its warehouses.
The exchange said in a statement that there is a significant risk that obtaining such metal from UK warehouses could involve high additional costs.
"Therefore, with respect to Russian produced nickel, there is a significant risk that there will be a dislocation between the price of the traded metal and the price of the underlying physical metal," it said. “The move does not prohibit Russian nickel from being traded on the exchange.”
There are two LME warehouses in the UK, in Hull and Liverpool.
The biggest Russian nickel producer Nornickel did not respond to Kallanish’s request for comments.
The enterprise increased nickel production in the first half by 26% on-year to almost 100,000 tonnes. The company plans to produce 205,000-215,000 t/y of nickel this year.
Nornickel’s consolidated revenue was flat to $9 billion in the first half of 2022 amid lower overall metal sales volume owing to logistical disruptions.
It expects the nickel market surplus to widen to 75,000 t in 2022 and further to 150,000 t in 2023. However, this will mostly be in low-grade nickel, on the back of the ramp-up of new NPI capacities in Indonesia alongside growing production of nickel chemicals.
The company is also ready to discuss the merger of Norilsk Nickel and Russian aluminium producer Rusal.
Source:Kallanish
