The invasion of Ukraine by Russian troops had an immediate impact on the flow of minerals and metals in the country. Today, many of the world’s sanctions on Russian banks and businesses have led to numerous battles for buyers and sellers of aluminum, stainless steel and other metals and raw materials to keep their trade channels open.
In Ukraine itself, which is being attacked by Russia from land, air and sea, the national chamber of commerce Force majeure (Suspension of contract execution) Notification that will come into effect on February 24, when the invasion of Russia began.
According to Interfax, the Ukrainian Chamber of Commerce posted a Facebook notice in late February, “From February 24, 2022. [the conflict’s] The official purpose is a special and unavoidable objective situation for an entity and / or individual under contract, certain taxes and / or other obligations, the performance of which is contract, contract, treaty, legislation or It was done in accordance with other regulatory conditions. The occurrence of such force majeure situations has made it impossible to act and perform in accordance with it within a given period of time. “
The Davis Index Metals News Service reported that metal producers such as ArcelorMittal, Metinvest and Ferrexpo stopped production shortly after the invasion due to labor safety concerns.
The Davis Index is followed by Ukraine-based mining and steel maker Metinvest. Force majeure It cites closed ports, infrastructure damage, and labor safety.
Maersk, the world’s shipping line, said in an update on March 1st: Temporarily suspended (except for dual-use items), except for grocery, medical and humanitarian supplies. “
The Danish-based shipper adds: in the middle Going to Russia in search of restricted products, mainly dual-use products. “
Foreign buyers of Ukrainian steel and other metals and raw materials shipped via the Black Sea are one of those struggling to change their purchasing routines. The Davis Index lists Mexican steelmakers and buyers as one sector that is already paying more for either iron ore or semi-finished products.
As sanctions against Russia expand, these changes in purchasing habits can become widespread. According to S & P Global Platts, in 2021 Russia exported more than half of the 76 million metric tonnes of steel.
In 2020 Russia exported more than 4.7 million metric tons of iron scrap, according to the Brussels-based International Recycling Authority (BIR). Russian steel makers and scrap exporters will also have to overcome new banking regulations and many country commitments to reduce transactions with Russia after the invasion.
Primary aluminum is another Russian mass export. According to the US Census Bureau, in the first 11 months of 2021, approximately 183,000 metric tons of Russian-made finished and semi-finished aluminum were brought to the United States. Despite previous sanctions, Russia became the second largest exporter of aluminum to the United States last year after the United Arab Emirates (excluding Canada and Mexico, which are partners in adjacent free trade areas). ..
After the invasion, the prices of finished aluminum and aluminum scrap are on the rise. In early March, the London Metal Exchange (LME) price reached $ 1.58 per pound, or $ 3,495 per metric ton. This is an increase of 107 percent compared to the value of $ 1,684 per metric ton of LME aluminum in early March 2021 (76 cents per pound).
Regarding trade patterns, the Davis Index in early March imposed sanctions on the participation of some Russian banks and companies in the global SWIFT remittance system, trading with the country and its major aluminum producer Rusal. Is characterized as meaning that can be a “boring process”.
