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LME and CME: US and UK ban Russian raw materials

The joint decision by the US and UK governments to impose a ban on the sale of Russian raw materials, including nickel, aluminium, and copper, on major commodity exchanges like the London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME), marks a significant escalation in sanctions against Russia. This move not only impacts the Russian economy directly but also sends a strong message about the unity of these Western powers in response to Russia’s actions.

The refusal of the London Metal Exchange management to take action until prompted by the governments underscores the influence of political decisions on global economic platforms. The decision to finally act reflects a coordinated effort to apply pressure on Russia’s commodity exports, which are vital to its economy.

The noticeable price jumps of nickel and aluminium on the LME in response to the ban highlight the immediate impact of such sanctions on commodity markets. These price increases indicate market uncertainty and reflect the anticipation of reduced supply due to the ban on Russian raw materials.

The differing responses between the US/UK and the European Union reveal the complexities and challenges of implementing unified sanctions among allies. While the US and UK have taken decisive action, the EU’s internal divisions have led to a lack of clarity and cohesion in its approach to sanctions against Russian base metals.

Overall, these developments signal a significant tightening of economic pressure on Russia and demonstrate the resolve of certain Western powers to hold Russia accountable for its actions.

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