The United States and the United Kingdom have announced restrictions on the trade of new Russian-origin metals, such as aluminum, copper, and nickel, on global metal exchanges and in derivatives trading. This decision is a follow-up to the Group of Seven nations' commitment made in February to reduce Russia's revenues from metals due to its ongoing invasion into Ukraine.
Russia is a significant exporter of metals like aluminum, steel, and titanium. However, officials stated that the economic impact of the ban on consumers and producers would be minimal. The aim of the restrictions is to limit Russia's earnings from metals, as the country has generated $40 billion from metal exports in the past two years.
Treasury Secretary Janet Yellen emphasized that the new prohibitions on key metals, in coordination with the United Kingdom, are designed to target Russia's revenue to support its actions in Ukraine. The measures are intended to reduce Russia's earnings while safeguarding partners and allies from any adverse effects.
Under the new restrictions, new Russian metals will not be permitted for trading on exchanges like the London Metal Exchange and Chicago Mercantile Exchange. However, metals produced before midnight on Saturday in London will still be allowed for trading.
Following Russia's invasion of Ukraine, the United States and the European Union have imposed sanctions on Russia's major banks and elite individuals. Additionally, they have frozen the assets of Russia's Central Bank held outside the country and excluded Russian financial institutions from the SWIFT bank messaging system. Furthermore, both the U.S. and U.K. have previously sanctioned Russian gold, gas, and diamonds.
