Metal stocks gain after US, UK prohibit exchanges from accepting Russian metals

Metal stocks have gained over the last week after a surge in metal prices following the prohibition imposed on the London Metal Exchange (LME), the Chicago Mercantile Exchange (CME) and other metal exchanges from accepting new aluminium, copper and nickel produced by Russia.

According to a report, the LME, which is the world's largest and oldest exchange for metals, and the CME have complied with these sanctions.

Shares of Vedanta have gained over 9% in the last five days while Hindalco has risen over 3.5% in the last five days. Hindustan Zinc shares have gained over 2.5% during the period.

According to the report, the sanctions intend to minimise Russian export revenue in the wake of the country’s ongoing war with Ukraine while also bringing down the risk of market disruption. Existing stocks of Russian metal on global exchanges are exempt from these measures, the report stated, adding that they can still be traded and withdrawn from warehouses.

Rusal, which is a Russian aluminium producer, stated that these sanctions would not have any impact on its ability to supply aluminium, the report stated. Russia is a major producer of metals and its share in global production of aluminium stands at 5% while for refined nickel it is at 6%. The country’s share in global production of copper stands at 4%.

Aluminium was trading over 1% higher at $2,587/metric tonne on the LME while nickel was trading 0.67% lower at $17,726.

Some of the Indian metal stocks have provided decent gains since the beginning of 2024. For example, shares of Vedanta have gained over 51% on a year-to-date basis. Hind Zinc has risen over 27% during the same period. Shares of National Aluminium Company (NALCO) have registered gains of over 32% while Hindustan Copper stock has risen nearly 30% since the beginning of this year.