US sanctions against Russian copper producer UMMC

On July 20th, foreign media reported that the US Treasury and State Department announced on Thursday that the US has imposed sanctions on Russia's main copper producer, Ural Mining and Metallurgy Company (UMMC), in order to "reduce Russia's revenue from the metals and Mining Industry.

Since Moscow invaded Ukraine in 2022, Washington, along with Western allies, has imposed sanctions on hundreds of Russian companies and individuals. On Thursday, nearly 120 individuals and entities from the agency joined the sanctions list.

UMMC did not respond to Reuters' request for comment. The United States has set a deadline of October 18th for terminating transactions with UMMC.

UMMC has not disclosed its copper production in recent years. As of 2020, the company's copper production accounted for approximately 40% of Russia's copper production, roughly equivalent to its peers, Nornickel, which has not yet become a target of Western sanctions.

After the United Kingdom sanctioned the controlling shareholders of UMMC in 2022, the London Metal Exchange (LME), the world's largest and oldest metal forum, restricted UMMC's new copper delivery.

Since October last year, copper produced by UMMC can only be delivered to the registered warehouse of LME if the owner can prove to LME that it does not violate the sanctions regulations.

As of June, a large amount of copper inventory in LME registered warehouses has been cancelled, and the proportion of Russian produced copper in available inventory has increased from 33% in May to 66%.

However, the actual quantity of Russian copper in the inventory decreased from 29600 tons in May to 22750 tons in the previous month. Since then, the total available inventory has increased.