The sanctions are designed to restrict Russian aluminium, copper, and nickel but are carefully tailored to minimise market turbulence.

The LME has put restrictions on Russian metal produced on or after April 13, meaning the global exchange will allow the existing stocks to be traded, which is particularly significant for the industry since Russian metals accounted for over 90 per cent of warranted stocks at the end of March 2024.

The ban on new metal deliveries to the LME and its US counterpart, the CME, will likely split the market for Russian metal, with the exchange basis price moving to a premium over the present non-exchange deliverable metal.

No matter what, there is an active global market for Russian aluminium produced by Rusal, notwithstanding self-sanctions by many Western countries. This fact is further underpinned by Russian aluminium accounting for over 90 per cent of the LME warranted stocks since the end of December 2023.

Although the US and UK governments have prohibited all Russian aluminium imports, the latest sanctions still allow physical market trading in other regions for those metals produced before April 13, raising the possibility of Russian metal deliveries onto LME.