Market Intelligence Report - April 2022

The war in Ukraine and the corresponding economic and political sanctions against Russia and Belarus have an impact on the manufacturing industry. With Russia being one of the countries with the most natural resources in the world, actions taken result in an increase of commodity prices.

Market Insights

Materials

With regards to producers of aluminum in the world, after China (56% of world production of refined aluminum in 2019), Russia is the second largest producer country for aluminum with a share of 6%.

Material prices have been rapidly increasing over the past months. Steel prices have increased 75% YOY, with extreme increases since the beginning of the Ukrainian war in February (EU-Warmband; see here). Furthermore, Aluminum prices have increased 58% YOY.

Trading was halted for some materials. The London stock exchange has suspended the trading of nickel in CW10 after the price increased by as much as 250% in two days. Overall, the price for nickel has doubled over the past 12 months, although prices recovered slightly after the peak in mid-march. All base metals have seen prices rise by 10% in the past three months compared to the same period last year.


Ferroalloys

The Russian-Ukrainian war has also affected the ferroalloy market. The withdrawal of major transport companies from Russia and the imposition of unprecedented sanctions against Russian business put further ferroalloy supplies from the country into question.

In particular, prices for ferrochrome, of which Russia is one of the largest global suppliers, have risen by more than 25%, according to Metalshub. Quotes for ferrotitanium in Europe doubled during the month, while ferrovanadium prices rose by almost 50%. And, as with other ferroalloys, there is no direct ban on Russian products on Western markets, but the introduction of personal sanctions against the owners of some Russian companies (notably Evraz) creates reputational risks.

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