Goldman Sachs: LME ban on Russian metals will not cause immediate supply and demand shock
April 17, 2024
According to foreign news on April 15, Goldman Sachs analysts said in a report on Monday that the London Metal Exchange (LME) ban on new production of Russian metals will not cause an immediate supply and demand shock. The LME issued a notice on Friday banning trading of Russian metals produced on or after April 13 in its system to comply with new sanctions imposed by the United States and Britain over the conflict between Russia and Ukraine. According to Goldman Sachs, Russian producers can continue to sell metals to non-UK/US markets, so "from a fundamental perspective, these exchange-focused rule changes will not produce the necessary supply and demand shocks". Goldman added that the LME's ban on future supplies of newly produced Russian metals should at least partially improve demand for non-Russian materials.
The bank said the increased liquidity of its current holdings of Russian metals could attract more people to write them off, especially copper. Analysts said that continue to be bullish on copper and aluminum, while expecting the two metals to enter a reflation phase, the "bull market" will be a structural extension. However, they expect the ongoing surplus in the nickel market to limit the sustainability of the rally.
