The Pittsburgh, US-based industrial corporation and eighth-largest aluminium producer, Alcoa, supports the proposal submitted last week by Russian aluminium giant Rusal for the London Metal Exchange to bring forth the details concerning the source of all metal in LME-approved warehouses.
Following the Ukraine-Russia geopolitical crisis, Rusal has not been directly targeted for sanctions by any nation. On the other hand, Alcoa has diligently campaigned to prohibit Russian metal from being traded and stored on the LME. It is concerned that large amounts of aluminium in the LME warehouse might mangle pricing.
After an industry consultation in October, the London Metal Exchange (LME) pronounced there would be no bar of Russian metal as a compelling section of the market was still planning to acquire it in 2023.
Alternately, the world's largest and oldest metals trading forum announced that beginning in January 2023, it will publish regular reports detailing the percentage of Russian metal stored under warrant in LME warehouses to impart transparency.
As opposed to focusing on Russian metal, Rusal has requested that the LME start regular disclosure of metal stocks' origins.
Alcoa said, “We support proposals that would provide market participants with more data, including monthly reports that would disclose the origin of all metal stocks on the warrant.”
“The important issue at present is to ensure that the market has increased visibility on Russian-origin aluminium, allowing both the LME and market participants to monitor this situation carefully.”
According to the LME's announcement last week, it is considering its upcoming monthly report format and will work to meet all stakeholders' needs.
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