Metals and the invasion: Russian war reconfigures commodity supply flows – by Taylor Kuykendall (SP Global – February 21, 2023)

World traders have turned away from the Moscow-based economy in favor of trade with other suppliers of metals and mines as experts expect permanent changes to how the world thinks about its supply chains.

One year after Russia’s invasion of Ukraine, metals and mining trade flows have shifted as countries look to regionalize supply chains for crucial raw materials due to aversions to purchases that could support the Kremlin.

The start of the war in late February 2022 sent the price of many commodities skyrocketing, but buyers have adjusted after much of the world opted to bench Russian metal suppliers. However, Russian commodities are moving despite countries looking elsewhere for supplies, including by increasing domestic sourcing of crucial materials.

“The Russians found a way to sell, and the rest of the world found a way to buy,” Rick Rule, veteran mining sector investor and former president and CEO of Sprott U.S. Holdings Inc., told S&P Global Commodity Insights. “As always, while markets are messy, they work. The immediate cure for high prices was, of course, high prices.”

Market dislocation

After the start of the invasion, the value of Russian exports of cobalt, copper, diamonds, iron ore, gold and other selected metals and mining products dropped 35.5% between February and April 2022, according to S&P Global Market Intelligence data. Since that steep decline, the cumulative value of those exported goods has held relatively steady. However, the total value of the same materials remained down 46.9% year over year in October 2022, based on the most recent available data.

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