In a significant move to curb Russia’s revenue and support for its war on Ukraine, the U.S. Department of the Treasury, in collaboration with the United Kingdom, has announced two new prohibitions targeting Russian metal exports.
Effective immediately, the import of aluminum, copper, and nickel of Russian origin into the United States is banned. This decision also restricts the use of Russian-produced aluminum, copper, and nickel on global metal exchanges and in over-the-counter derivatives trading. The aim is to limit the revenue that Russia can earn from these key metal exports.
U.S. Treasury Secretary Janet Yellen stated, “Our new prohibitions, in coordination with the UK, will continue to target the revenue Russia can earn to fuel its brutal war against Ukraine.”
Furthermore, the Treasury has implemented guidelines banning the export, sale, or supply of warranty services for metals manufactured in Russia after April 13, 2024, on metal exchanges. Additionally, physical settlement for derivative contracts involving Russian metals is restricted.
These actions will impact metal exchanges like the London Metal Exchange and the Chicago Mercantile Exchange, prohibiting them from accepting new aluminum, copper, and nickel from Russia. The UK and U.S. joint efforts are estimated to affect Russian metal exports worth $40 billion.
While titanium and platinum group metals are exempt from these prohibitions due to supply chain sensitivities, the measures aim to further limit Russia’s ability to earn from metal exports. This comes as a blow to Vladimir Putin’s funding for the war in Ukraine, as the value of Russian metal exports has already declined in the past year.
