LONDON, May 4 (Reuters) - The London Metal Exchange (LME)
said on Wednesday it had stopped allowing Russian-produced lead
into its warehouses following European Union sanctions on the
country's products, effectively shutting Russian lead out of the
world's biggest metals market.
Russia is not a major producer of lead, but the decision
could add to market jitters about a potential ban on its
aluminium and nickel, where its supplies are far more important.
Benchmark prices for lead on the LME jumped more
than 2% to about $2,300 a tonne after the news. By 1540 GMT
prices were up 1.2%
"This Notice announces the suspension of warranting of
Russian produced lead in any LME approved warehouse with
immediate effect," the LME said in a statement.
The suspension means Russian lead cannot be delivered
against LME contracts, effectively meaning it can't be traded on
There are currently no lead inventories of Russian origin in
its approved warehouses, the exchange said. Fregat LLC http://www.ecofregat.ru/en
was the only Russian LME brand.
The LME said it was responding to an April measure by the
European Union to restrict certain products from Russia,
including "unwrought lead", after Moscow's invasion of Ukraine.
There would be minimal impact on Western operations as most
of Russia's lead exports, which are sourced solely from recycled
batteries, are destined for China and Kazakhstan, said Wood
Mackenzie analyst Farid Ahmed.
Russia produces about 150,000 tonnes a year of secondary
lead, CRU Group analyst Neil Hawkes said.
In response to sanctions on Russia by the United Kingdom,
the LME last month suspended deliveries of some Russian produced
metals into its approved warehouses in Britain.
The stakes are higher if Western countries widen
restrictions to include a ban on Russian metals including
aluminium, nickel and copper from major producers Rusal
and Norilsk Nickel.
Russia supplies about 10% of the world's nickel, 6% of its
aluminium and around 3.5% of its copper.
The LME, owned by Hong Kong Exchanges and Clearing Ltd
, said it would not go beyond what Western sanctions
against Russia dictate.
Lead-acid batteries account the majority of the metal's
demand, which is pegged at 12 million tonnes a year.
(Reporting by Zandi Shabalala Editing by Sandra Maler and Mark