Jakarta, CNBC Indonesia – It is predicted that supply disruptions to a number of commodities will occur if the conflict between Russia and Ukraine continues. The reason is that Russia has been known as an exporter and producer of several key commodities for the global industrial ecosystem.
Launching Reuters, here are some commodities that are potentially threatened with supply due to the conflict between Russia and Ukraine:
Petroleum
Russia is currently the third largest oil producer in the world, after the United States (US) and Saudi Arabia. Russia’s oil production now stands at 11 million barrels per day.
Of this total production, about 7 million barrels of oil are routinely exported by Russia to various countries. Prolonged conflict can disrupt the supply chain of this commodity.
Gas
Besides being known as a producer of oil, Russia is also the second largest natural gas producer in the world today. The supply of natural gas from Russia even fulfills 40% of the demand for this commodity on the European continent.
Coal
Russia is the sixth largest coal producing country. The amount of black gold production from Russia now reaches 400 million tons per year, or the equivalent of 5% of global coal production. More than half of Russia’s coal production is often exported to various countries, including China as the main importer.
Aluminium
Throughout 2021, Russia produced 3.8 million tons of aluminum, equivalent to 6% of global aluminum production. Aluminum produced by Russia is widely exported to countries in Asia, Europe and North America.
cobalt
Russia is also predicted to have a cobalt production rate of 7,600 tons per year in 2021. This production is equivalent to 4% of the total cobalt produced in the world over the past year.
The largest cobalt producer in Russia is Nornickel. This company throughout 2021 has sold more than 5 thousand tons of cobalt, the majority of which is sent to European countries.
Copper
Russia produced 920,000 tonnes of refined copper last year, about 3.5% of the world’s total, according to the USGS. Of this amount, as much as 406,841 tons of copper were produced by Nornickel. Russian production of copper is widely exported to Asia and Europe.
Nickel
Nornickel is also known as the world’s largest producer of refined nickel from Russia. The company will produce 193,006 tons of nickel in 2021 or about 7% of global mining production which is estimated to reach 2.7 million tons. Their nickel production is sold to global industrial consumers under long-term contracts.
Palladium and Platinum
Nornickel is also the world’s largest producer of palladium and a major producer of platinum. The company produced 2.6 million troy ounces of palladium last year or 40% of global mining production and 641,000 ounces of platinum or about 10% of total mine production.
Gold
Russia is also known as the third largest gold producer in the world after Australia and China. The country’s gold production is equivalent to 10% of the global gold supply.
Russian gold is mostly produced by two companies, namely Polyus and Plymetal. Russia’s gold production is widely sold to commercial banks in the country. After that, the gold is often exported to other countries.
Titanium
According to USGS data, Russia’s titanium production throughout 2021 will reach 27 thousand tons. Then, the amount of production of Titanium Ukraine at the same time is 5,400 tons. If added together, the titanium production of these two countries is equivalent to 15% of the global supply of this commodity.
Baja
Russia produces 76 million tonnes of steel or nearly 4% of the global total, according to the World Steel Association. Severstal, NLMK, Evraz, MMK and Mechel are the main Russian steel producers. They export about half of their production mainly to Europe.
Diamond
Russian company Alrosa is the world’s largest producer of rough diamonds, producing 32.4 million carats in 2021. This is equivalent to 30% of global diamond production. This diamond production is exported mostly to Belgium, India and the United Arab Emirates.
Fertilizer
Russia is a major producer of potassium, phosphate and nitrogen containing fertilizers – the main plant and soil nutrients. The country produces more than 50 million tonnes per year of fertilizer, 13% of the global total. Russia often exports its fertilizers to Asia and Brazil.
Seeds/Oil Seeds
Russia and Ukraine are the world’s main wheat suppliers. If calculated, the total grain production of these two countries reaches 29% of global exports, most of which is done via ports on the Black Sea.
The movement of vessels in the smaller Sea of Azov has been suspended and if shipping is disrupted from the Black Sea it will disrupt supplies for major importers, particularly in the Middle East and North Africa.
Ukraine is one of the top four exporters of maize and maize flour in the world along with the United States, Argentina and Brazil. The two countries also account for about 80% of global exports of sunflower oil.
(pgr/pgr)
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