Russia is considering limiting metals exports to the West

In response to Western sanctions, Russian President Vladimir Putin suggested this week that Moscow limit exports of metals or other commodities in which Russia has a large share on global markets.

Putin mentioned uranium and nickel as well as titanium, but suggested that other commodities could be restricted, pointing out that Russia is a major producer for natural gas, diamonds, and gold.

Putin said that any restrictions do not have to be immediately implemented and they should not harm Russia.

Commodity exports provide a major source of foreign currency income for many of Russia's biggest companies. This includes state-owned Rostec, Rosatom and Nornickel.

Collectively, these companies provide employment for around one million people.

Here is a list of the key commodities, non-energy, that Putin mentioned and any other commodities that may be affected.

URANIUM

Russia is the sixth-largest uranium producer in the world and controls 44% of the global uranium enrichment capacity. The U.S., China, South Korea, and France were the top three Russian uranium buyers in 2023.

In May, U.S. president Joe Biden signed a law banning imports of enriched uranium from Russia. This trade is worth about $1 billion per year. It did include waivers for supply concerns up to 2027.

Last year, Russia supplied 27% of enriched uranium to U.S. commercial reactors.

NICKEL

Nornickel is based in Russia. It was the world's largest nickel producer before Indonesia increased its nickel production several years ago. This created a surplus on the global nickel market.

Nornickel currently produces 6% of the world's primary nickel. Nornickel's share of global production is high, at 19%.

The majority of nickel in LME registered warehouses comes from Russia.

Nornickel is focusing on Asia. China is the largest buyer and this region accounts for more than 50% of global sales. Europe accounts for only 24% of Nornickel's sales.

The United States and Britain banned the importation of metals in April after prohibiting metal trading exchanges to accept new nickel, aluminium, and copper produced by Russia.

TITANIUM

The third largest producer of titanium sponge in the world, Russia has a 6% market share. This material is used for aerospace, marine and automotive applications.

Before 2022, Ukraine was one of the major exporters of titanium concentrates to Russia.

China has a 58% share of the market. Apple launched a new iPhone series that featured a titanium-clad body.

VSMPO-AVISMA, the largest titanium sponge manufacturer in Russia, supplied titanium to Boeing and Airbus prior to the Ukraine War. Canada imposed sanctions but granted waivers for Airbus plants to continue using Russian titanium.

Boeing stopped purchasing titanium from Russia in less than two weeks following the beginning of the conflict with Ukraine.

Russian customs data shows that although the United States continues to buy Russian titanium, the largest purchasers are France and China.

Russia is the second largest gold producer in the world, after China. It accounts for 9% of global production.

According to Trade Data Monitor, Hong Kong was the biggest importer of Russian gold in 2023. All of the country's main gold producers, including No. Western sanctions have been imposed on all of the country's major gold producers, including No.

DIAMONDS

Alrosa, a sanctioned miner, accounts for more than 30% of the global rough diamond production. In 2023, Russia exported diamonds mainly to United Arab Emirates (UAE), India, Hong Kong and China.

In January 2024, the Group of Seven (G7) countries will ban direct imports of Russian Diamonds.

In March, the European Union and G7 banned imports of diamonds from Russia via third-country sources. Russia has said that it will buy diamonds regularly from the producer who is under sanctions through a government fund.

ALUMINIUM

Rusal, a Russian company, is the largest aluminum producer in the world outside of China. It will account for about 5.5% (or more) of global production by 2023. The metal is supplied to Asian and European market.

China is now Rusal’s biggest customer, with a 23% share in exports by 2023. This is up from just 8% in the year 2022.

PALLADIUM AND PLATINUM

Nornickel, with a 41% palladium share and a 11% platinum share of the global production, is the largest palladium producer in history.

According to TDM, the largest palladium buyers from Russia in 2023 were Hong Kong (China), U.S., Japan and China.

COPPER

According to the U.S. Geological Survey, Nornickel produced 425,000 tonnes of refined copper in Russia last year. This is about 3.7% the total world production. Russia's major export markets are Asia and Europe.

COBALT

According to USGS, Russia produced 8800 tonnes of cobalt in the past year. This is about 4% of global production. Russia is third in the world, behind Indonesia and the Democratic Republic of Congo.

Nornickel will be the biggest cobalt producer in Russia in 2023, with China being the main buyer. Congo and Indonesia have been oversupplying the market despite a rise in demand from electric vehicle batteries. Reporting by Gleb Stlyarov, Anastasia Lyrchikova, Polina Deitt in London, and Eric Onstad, David Evans, and David Evans.

(source: Reuters)