Cobalt, vanadium and more: all the metals (and companies) affected by the Russia-Ukraine crisis
The metals market is concerned about the possible impact of a Russian invasion of Ukraine and the ensuing sanctions. All the details
The metals market is following with particular attention the developments of the crisis between Russia and Ukraine, trying to understand in advance what will be the impact on the supply-demand balance, and consequently on prices, of the economic sanctions that the West could impose against. Moscow in case of attack in Kiev.
ATTENTION ON CHINA, BUT NOT ONLY
Argus , a portal specialized in raw materials, writes it, which specifies how the market's attention is nevertheless continuing to focus on China and the Lunar New Year holidays: the country is in fact the main consumer in the world of many commodities . A worsening of tensions between Russia and Ukraine, however, risks putting pressure on the value chains of many metals.
THE COBALT AND NORNICKEL
In particular, traders are keeping an eye on Nornickel , Russia's first producer of nickel and cobalt (both key metals for electric vehicle batteries). Nornickel produces between 1800 and 2100 tons of cobalt per year, and is a major supplier to the German chemical company BASF.
Most of the company's output comes from its plant in Finland, so the direct impact on the supply chain in the event of a conflict in Ukraine would be limited. Nonetheless, if a war really does start, many sectors that need cobalt for their products – from batteries to metal alloys to catalysts for the chemical industry – could face supply difficulties as supply would be swallowed up by the aerospace industry. , called to supply arms and appliances to Ukraine.
THE VANADIUM AND EVRAZ
There is also nervousness in the vanadium sector, a metal used in the production of steels and engines for aviation. European prices of the element have already risen by 15 percent since the beginning of 2022 due to reduced availability from Brazil: the fault of the floods that hampered production. Now there are fears of a further squeeze on the offer should the Russian company Evraz be targeted by sanctions. In 2020 Evraz produced 19,533 tons of vanadium, and 15,202 tons in the first nine months of 2021.
THE TUNGSTEN
Sanctions on Russia could also create disturbances in the tungsten market, a strategic material because it is used in the armaments industry. Russia is the third largest producer in the world, after China and Vietnam, and could limit its exports in retaliation.
THE FERREXPO PROBLEM
One of the companies in the commodities sector most vulnerable to the possibility of a war in Ukraine is the Anglo-Swiss Ferrexpo, which produces iron ore pellets: its production activities are concentrated in Ukrainian territory.
SWIFT AND GAS
For Europe as a whole, given its deep reliance on Russian gas, the greatest concern is the US threat to exclude Russia from the SWIFT payments network . This is a very important standard within the international financial system, and is also used for the payments of gas supplies to the Old Continent.
WHAT ABOUT LNG?
Two anonymous Japanese buyers of Russian liquefied natural gas (LNG) made interesting comments to S&P Global Platts about Western sanctions against Moscow.
The first spoke of possible difficulties in paying suppliers (which are not Russian state-owned companies directly, but joint ventures with other companies) in the event that dollar transactions are affected by sanctions and a switch to the euro is required.
The second, on the other hand, said he would prefer to buy from less risky parties from a political point of view, such as Qatar, Australia and the United States .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/metalli-crisi-russia-ucraina/ on Tue, 01 Feb 2022 09:02:30 +0000.