There is not only gas, among the exports of raw materials with which Russia feeds a large part of household consumption and European industrial production, with production equal to over 10% of the world. But what comes from Russia as raw materials is also something else. In particular, i rare metals and the rare earthfundamental components for the most technological industry such as the car and microchips, which mean telecommunications, information technology, defense.
a more hidden phenomenon that cannot even be fully measured by experts. A report by the American bank JP Morgan released on Thursday 3 shows that, unlike those related to oil and gas exports, the risks for other commodity markets are not easily modeled. And they are a major concern.
The limits
Key elements such as the platinum and palladium for catalytic converters for automobile production. Jp Morgan writes. Russia produces 43.9% of the palladium and 14.1% of the world’s platinum. Even the neon a key element for semiconductor production and Russia one of the main exporters. The fear that bottlenecks will occur in these fundamental fields of the world economy such as cars and chips, exactly as happened in 2021 due to the lockdowns for the pandemic. And with each passing day, it burns reserves. For now, the stocks of these goods and the parts they enter are enough to last four to six monthsreject Jp Morgan.
The other raw materials
And then? It is the great unknown that governments and businesses are trying to find a solution to. In addition, the surge in natural gas prices is making the production of gas prohibitive in terms of costs ammonia and exports of potassium from Russia and Belarus, which together make up a third of the product traded worldwide. They are essential elements for the production for fertilizers. Without them, agriculture could be “upset”, warns the US bank in both 2022 and 2023.
The effects of the shortage of fundamental raw materials to keep the engines of the economy running will be heavy for world GDP, whose growth – the American bank estimates – will fall by 0.8% this year, while inflation will increase by one month. further 0.9%. And Europe will pay the price above all, even if the bank does not expect it to leave a lasting mark on global expansion. But for countries that are net importers – such as Italy -, the shock will be clearly negative.
Transition at risk
The shortage of raw materials is the new nightmare of European industry. Russia also accounts for 11% of world production of nickel, used to produce electric and stainless steel vehicle batteries. Since the beginning of 2022, nickel has seen a price increase of more than 18%, reaching a record for a dozen years now. Moscow, with Indonesia and the Philippines controls about 60% of global production) whose demand is destined to rise given the boost being given to green vehicles.
Batteries and beyond
Russia also extracts about 4% of the cobalt world, another battery ingredient; a quarter of his vanadium used in the production of steel, whose European prices have already risen in double digits since the beginning of 2022.
Aviation and weapons
Russia’s Vsmpo-Avisma alone occupies 25% of the world market for titanium (important for the aviation industry). Eyes also on the tungsten, crucial because it is used in the armaments industry. Russia is the third largest producer in the world, after China and Vietnam.