The Van Trump Report

Russia and Ukraine are Commodity Powerhouses – What’s at Risk?

Russia and Ukraine are big players in corn, wheat, and oilseed markets, something most in the agriculture world are very much aware of. Russia of course is also a key supplier of oil, natural gas, and coal. But both countries have an even broader wealth of raw materials that the world can not easily substitute if trade flows are disrupted. Below are a few of the commodities beyond grains and energy that could face supply shocks:
Palladium and Platinum: Russia’s Nornickel is the world’s largest producer of palladium and a major producer of platinum. The company accounted for about 40% of global palladium mine production and 10% of platinum production in 2021.

Nickel: Nornickel was also the world’s top nickel producing company in 2021, accounting for about 7% of global mine production.    

Russia is home to the world’s largest aluminum producer outside China, United Co. Rusal International. The company accounted for about 6% of estimated global production in 2021.
Russia produced about 4% of global cobalt last year, making it the second-largest producer behind the Democratic Republic of Congo.

Gold: Russia is the world’s third-largest producer of gold after Australia and China, accounting for approximately 10% of global mine production.

Titanium: Russia is the world’s third-largest producer of titanium, a critical component in commercial aircraft engines. Russian company VSMPO-Avisma is a key supplier to Airbus, Boeing, and many others in the wider supply chain.

Steel: Russia produced 76 million metric tons of steel last year, or nearly 4% of the global total, according to the World Steel Association. While most goes to Asia, the country’s steel made up around 10% of Europe’s imports in 2021. Ukraine is the 13th largest supplier of steel. The country is also home to ArcelorMittal, which runs one of Europe’s biggest steel mills located in central Ukraine.

Iron Ore: Ukraine is home to the world’s largest reserves of commercial-grade iron ore and the fifth-largest exporter of iron ore by volume. Russia is the world’s fourth-largest iron ore exporter. 
Most readers probably know Russia is a key fertilizer provider but it seems appropriate to provide some details for those that might not be aware of how essential those supplies are to global agriculture. Some fertilizers shipments from Russia have already been somewhat curtailed by export controls imposed by the Kremlin late last year, which included a two-month ban on ammonium nitrate shipments that began on February 1st.

According to Argus, Russia was the largest exporter of urea, NPKs, ammonia, UAN and ammonium nitrate last year, and the third-largest potash exporter. Russia is also a major exporter of phosphates with a combined 4 million tons of DAP/MAP shipments last year. It is the fourth-largest sulphur exporter. The major markets for Russian fertilizers and related raw materials include Brazil as well as the EU and U.S. Argus notes that Russian nitrogen products are especially critical to European buyers this year as the continent remains lightly supplied for spring fertilizer applications after several nitrogen plants were forced off line for extended periods by high natural gas prices. (Source: Platts, Reuters, Argus, Bloomberg)

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