Prices for zinc and copper receive a significant boost on the LME
by David Fleschen
Prices for zinc and copper on the LME received a significant boost after the London Metal Exchange announced that it would restrict trading in these two metals from a major Russian producer and its subsidiaries. This in turn is likely to have fuelled speculation that a ban on metals from Russia altogether could soon be introduced, following last week's announcement that the LME was currently investigating this.
However, the market's reaction may prove to be exaggerated as a key owner of the company in question is on the UK's sanctions list and the LME is therefore merely complying with official guidance. The copper of the company concerned, which is already listed in the LME warehouses, is not affected by the sanctions. Metal trading with Russia is also not sanctioned in principle. Should the LME actually stop trading in Russian metal, this would be on its own initiative. It is still far from certain that it will decide to take such a drastic step without political pressure.
Source: Commerzbank Research, Photo: Fotolia