WASHINGTON/LONDON, April 12 2024 (Reuters) - Washington and...

WASHINGTON/LONDON, April 12 2024 (Reuters) - Washington and London on Friday prohibited metal-trading exchanges from accepting new aluminum, copper and nickel produced by Russia and barred the import of the metals into the U.S. and Britain.

The action is aimed at disrupting Russian export revenue amid Moscow's ongoing invasion of Ukraine, which has killed or wounded tens of thousands and reduced cities to rubble. Russia is a major producer of aluminum, copper and nickel.

The U.S. Treasury Department said Friday's action would prohibit the London Metal Exchange and Chicago Mercantile Exchange from accepting new Russian production of aluminum, copper and nickel.

"Our new prohibitions on key metals, in coordination with our partners in the United Kingdom, will continue to target the revenue Russia can earn to continue its brutal war against Ukraine," U.S. Treasury Secretary Janet Yellen said in a statement.

"By taking this action in a targeted and responsible manner, we will reduce Russia's earnings while protecting our partners and allies from unwanted spillover effects."

Both the British and U.S. measures will exempt the existing stock of Russian metal on these global exchanges so they can still be traded and withdrawn in an effort to minimize the risk to market stability, the British government said in a statement.The action does not block bilateral contracts, which will be able to continue, U.S. and British officials said, speaking on condition of anonymity.

The officials said continued trading of Russian metals off of the exchanges is expected to be at a discount, and that while the action does not restrict supply, it is expected that the amount of revenue Russia can get per trade will be reduced.

Washington and London will monitor the discount at which Russian metal is continuing to be exchanged elsewhere, the officials said.

Available aluminum stocks in London Metal Exchange-registered warehouses were 91% of Russian origin in March, unchanged from the previous month, LME data showed on Wednesday.The high share of Russian-origin metal in LME inventories has been a concern for some producers, which compete with Russia's Rusal, and some Western consumers who have avoided Russian metal since Moscow's invasion of Ukraine in 2022.

The share of Russian-origin copper stocks rose to 62% in March from 52% the previous month and the share of Russian nickel rose to 36% from 35% over the same period, the LME said.Friday's action is the latest in a series of sanctions imposed on Russia by the U.S., Britain and allies over the February 2022 invasion of Ukraine.

The U.S. last year extended its economic measures against Russia into the metals and mining sector with tariffs on the metals. Officials on Friday said the U.S. imports of the three metals had effectively fallen to zero since.

Britain banned the import of base metals from Russia in December 2023, and said it would extend the prohibition to related ancillary services when it could be done in concert with international partners.
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Ash here

If Russian Al and Cu are to be sold discounted off-exchange, Chinese and Indian buyers will queue for the opportunity, as they have for Russian oil.

This initiative seeks to influence the market of the two metals most in demand in the electrical revolution.

I doubt it will prove of any consequence whatsoever.

Ash