No End in Sight
With no outcome at first talks between Russia & Ukraine in Belarus, continued invasion & shelling of Ukrainian cities killing hundreds, including large number of Russian soldiers, Ukrainian civilians & children, bombarding of government buildings & monuments in capital Kyiv including iconic Kyiv TV tower, aerial images of 60-65 km long Russian military convoy lumbering towards, Ukrainian President’s resolve to fight till death & approximately 100,000 people joining territorial defense units, imminent uptick in fighting seems unavoidable. Also, with Mr Putin putting nuclear weapon systems on high alert, chatter of nuclear esclation has started to make rounds in West.
Energy Prices Surging
Since 24 February morning, when Russia started shelling Ukrainian cities, prices of Brent Crude have surged by 16% to USD 110.1 per barrel & EU Natural Gas by 37% to EUR 121.7
West Enlarging Financial Sanctions
The United States, Britain, Europe and Canada on Saturday moved to block Russia's access to the SWIFT international payment system as part of another round of sanctions against Moscow as it continues its assault against Ukraine. Societe Generale SA & Credit Suisse Group AG have halted the finance of commodities trading from Russia. Besides, Dutch banking firms ING Group NV and Rabobank are restricting lending to deals involving movement of commodities from Russia and Ukraine. US payment card firms Visa Inc and Mastercard Inc have blocked multiple Russian financial institutions from their network, complying with sanctions imposed over Moscow’s invasion of Ukraine.
Western Companies Start Quitting Russia
Boeing Co says it is suspending parts, maintenance and technical support for Russian airlines as well as major operations in Moscow. Danish shipping giant Maersk, Switzerland-based MSC and France’s CMA CGM say they will no longer take bookings for goods from Russia and will suspending most deliveries. US oil giant ExxonMobil says it will begin a phased withdrawal from the major oil field it operates in Russia on behalf of a consortium including Russian, Indian and Japanese companies. Italian oil giant Eni says it will withdraw from the Blue Stream gas pipeline linking Russia to Turkey in which it has a 50% stake.
Top 10 Commodity Export from Russia
Russia’s total export of about USD 462 billion was dominated by following top 10 commodities in 2021 & sanctions could create a huge supply side void
Crude Oil – USD 110 billion
Petroleum Products – USD 70 billion
Natural Gas – USD 56 billion
Machinery & Equipment – USD 33 billion
Ferrous Metals – USD 29 billion
Diesel Fuel USD – 26 billion
Liquid Fuels – USD 23 billion
Coal – USD 18 billion
Wheat – USD 9 billion
Aluminum – USD 7 billion
Iron Ore, Coking Coal & Steel Markets in Turmoil
Russia & Ukraine exported about 30.30 million tonne & 15 million tonne of steel in 2021, with the European Union being the largest importer of Russia's steel at about 9 million tonne. The Russia-Ukraine conflict has already distorted iron ore and steel supply chains as both nations are also major exporters of slabs to Europe and billets to MENA & SEA. The current situation in Ukraine has prompted several end-users in Europe to secure alternate supplies, regardless of its origin & price. However, it is difficult to say how long the disruptions in steel-related commodities will prevail but Indian mills can benefit in EU countries.
Titanium Supply Threatened
The escalating conflict between Russia and Ukraine is fuelling concerns about the titanium supply chain, with key producers located on both sides of the border and serving a global customer base. Russia's VSMPO-Avisma is the world's largest titanium sponge producer, with nameplate capacity of 34,000 tonnes per year and supplies a large portion of the titanium products used by Airbus and Boeing in their aircraft hulls.
Bron: Steelguru