Trade dislocations due to sanctions, high power prices and disruption to production facilities in the conflict zone are three major threats to the metals and mining industry due to escalating conflict between Russia and Ukraine, Verisk-owned (Nasdaq: VRSK) Wood Mackenzie says in a new report.
The market analyst expects the impact of any sanctions to depend on the exact nature of constraints put on Russian commodities and companies.
Woodmac’s VP, Robin Griffin, says in a news release Russian trade has typically stood up well during past sanctions, noting, however, previous policies have been very targeted, often focused on individuals and specific companies. “A Europe-wide or UN-led global approach would be a unique challenge,” says Griffin.
According to Woodmac, the most likely outcome of a strict EU sanctions regime would be that affected Russian-sourced commodities are redirected. A trade shift would see European demand backfilled. But Griffin expects the change to be messy and notes there are often more constraints due to quality differences.
Comments