While the horrendous human cost of Russia’s invasion of Ukraine is uppermost, the military action is also having knock-on effect on industry and different sectors worldwide.
Energy prices, nickel prices and sourcing of product – where many are actively avoiding bringing in materials and products from Russia – are impacting globally.
Materials and timber
Governments and trading associations are urging companies to cease trading with Russia and also Belarus in the case of Timber Development UK. The EU has imposed trade sanctions on Belarus, including timber. PEFC has recently labelled timber from Russia and Belarus as “conflict timber”, making it ineligible for certification. The Timber Trade Federation has gone on to stress the financial and reputational risks of continuing to trade with Russia and Belarus, with NGOs potentially not wanting ‘conflict timber’ in their inventories or buildings. Russia and Belarus account for approximately 10% of softwood imports in Europe.
Nickel, a key component in stainless steel, has soared in price. The London Metal Exchange was moved to suspend nickel trading after prices jumped dramatically. 10% of the world’s nickel derives from Russia (source: Guardian). Rising nickel prices presents a challenge to stainless steel fastener producers, importers, distributors and end users – they also impact on the power tool market, with nickel a key element of battery production (which is currently more in demand than even thanks to the rise of the similarly affected electric vehicle market).
Energy prices have been on the up for a while – since long before Russia’s invasion of Ukraine, but the move has exacerbated the situation further. Few will be able to remain immune to rising energy costs, from factories that use energy intensive ovens and processes, to higher running costs in general for everyone else. Reports have blamed rising energy costs on a cold 2020/21 winter in Europe, less wind in summer 2021 and increased demand in Asia. Russia is the world’s largest natural gas exporter and sanctions and/or threats to supply will push up energy costs in general.
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