Russia’s Rusal said on Friday that speculation the aluminum producer was planning to offload metal into London Metal Exchange (LME) registered warehouses was misleading.
The LME, the world’s oldest and largest market for trading industrial metals, said on Thursday it was considering a consultation on whether Russian aluminum, nickel and copper should continue to be traded and stored in its system.
Rusal, the world’s largest producer of aluminum outside China, has not been directly targeted by the Western sanctions imposed on Moscow after it sent thousands of troops to Ukraine on Feb. 24.
But some market sources have said they were concerned that Rusal would not be able to sell its metal used in the transport, packaging and construction industries and would deliver it to LME warehouses instead.
The suggestion “does not correspond to our physical sales, where we continue to service our global customers, including negotiating and planning 2023 offtakes,” Rusal said.
Some buyers have said they are shunning Rusal’s metal, while others are securing price discounts at the same time as the aluminum industry negotiates supply deals for 2023.
The LME said no final decision had been taken on whether to issue a discussion paper to ask for views on Russian metal, but that it was under consideration.
“A discussion paper could also lay out potential options which could be pursued on the basis of market feedback gathered, including the option to take no action,” Chief Executive Matthew Chamberlain said in the statement.
The LME did not detail the options that would be considered in a consultation.
Rusal is expected to account for 6% of global aluminum supplies this year.
Benchmark aluminum jumped 8.5% to $2,305 a tonne on Thursday as the possibility of the LME banning new Russian metal from the list of brands that can be delivered against its contracts triggered a buying frenzy.
It was last down 0.5% at $2,185 a tonne on Friday.
(By Polina Devitt and Pratima Desai; Editing by Elaine Hardcastle and Emelia Sithole-Matarise)
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