LONDON, April 16 - Aluminium stocks in London Metal

Exchange-approved warehouses are expected to slide in coming

months as new bans on Russian-origin metal exclude material

produced before April 13, market participants said, potentially

pushing LME prices higher.

By contrast, more Russian metal heading for China is likely

to weigh on prices in Shanghai, which fell on Monday after more

than two weeks of gains.

The U.S. and Britain on Friday banned the 147-year old LME

from allowing Russian aluminium, copper and nickel produced from

April 13 to be delivered into its warehouses, a move aimed at

shrinking Russian government export revenues that help pay for

its war with Ukraine.

Russian metal produced and put on warrant - a title document

conferring ownership - before that date can be cancelled and

re-warranted by UK LME members and their customers if the metal

is destined for non-UK clients.

"In aggregate, these changes should reduce the amount of

metal that can be delivered to exchange, while increasing demand

for existing exchange stock," said Marcus Garvey, head of

commodities strategy at Macquarie.

Russian metal accounted for 91% of the 342,225 metric tons

of aluminium inventories in LME warehouses in March. Draws on

LME stocks typically indicate tighter supplies and higher prices

to come.

Worries about future LME supplies can be seen in the

narrowing discount between the cash and three-month contract

prices , which have slipped to a two-month low around

$20 a ton from above $50 on Friday.

Benchmark three-month aluminium prices hit 22-month

highs of $2,278 a ton on Monday, a gain of more than 9% from

Friday's close, though they have since retreated.

"The LME ban on new metal deliveries will keep the

least-desirable Russian units off-exchange and will no longer

reflect their discount to the rest of the market," Citi analyst

Tom Mulqueen said.

This should be positive for LME prices as aluminium leaves

warehouses and is not replaced with excess Russian metal.

"Prior to this ban, Russia-origin metal had come to

increasingly dominate LME inventories, so pricing had

increasingly reflected the underlying discount for these

less-desirable Russia units," Mulqueen added.

Numbers for the discount on Russian aluminium are not

available, but the beneficiaries of lower prices for Russian

metal have been China and other countries such as Turkey which

have continued to trade Russian commodities.

China's imports of primary aluminium from Russia jumped to

nearly 1.2 million tons last year from around 460,000 tons in

2022, according to data provider Trade Data Monitor.

Those shipments are likely to increase, boost supplies in

China and undermine aluminium prices on the Shanghai Futures

Exchange.

(Editing by Jan Harvey)