(Reuters) - Ten European Union (EU) countries have proposed further sanctions on Russian trade, including its output of metals such as aluminium, to further cut the country's revenues and funding for its war in Ukraine, a letter seen by Reuters showed.

There are more than 2,000 individuals and entities on the EU's sanctions list, but not Russian metal producers such as Rusal or primary metal produced in Russia.

Signatories to the letter sent two weeks ago proposing bans on Russian-origin metal include Poland, taking over presidency of the EU in January from Hungary which has been hostile to the idea, one source familiar with the matter said.

"As metals make up the most important source of revenue for Russia besides fossil fuels, we must also impose additional import bans on metals," said the letter also backed by Denmark, Czech Republic, Ireland, Estonia, Latvia and Lithuania. 

Sweden, Finland and Romania also back the proposal.

The EU Commission will propose the new package in the second half of January with the aim of passing it in February to mark the third anniversary of Russia's invasion of Ukraine.

Most EU metal consumers have found alternative supplies from other countries such as copper from Peru and Serbia, but the EU still imports large amounts of Russian-origin primary aluminium.

The United States and Britain this year banned the import of metals produced in Russia, but the EU declined to follow due to resistance from members including France, which two sources familiar with the matter said no longer opposes the idea. 

"We do not have any position on this issue but we'll study all proposals on the table," said a spokesperson for France's representation to the EU.

The EU has so far only banned aluminium products including wire, tubes and foil, which amount to less than 15% of EU imports of the metal used in the transport, packaging and construction industries. 

"All decisions on sanctions are taken unanimously by the Member States in the Council," an EU spokesperson said.

"We do not comment on discussions in the Council and do not speculate on possible future developments."

A third source familiar with the matter said the EU could impose punitive tariffs on Russian metal, which do not require unanimity and could be an alternative to sanctions.

Sanctions or tariffs may now be more acceptable as EU imports of primary aluminium from Russia have dropped.

Between January and September, the EU imported nearly 118,000 metric tons of primary aluminium from Russia or around 6% of the total at more than two million tons, according to information provider Trade Data Monitor (TDM).

That compares with 11% and 20% in the same period last year and in 2022 respectively.



(Reporting by Pratima Desai and Julia Payne; Editing by Veronica Brown and Ed Osmond)