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Newsletter: Special edition

Ukraine and Belarus are significant global suppliers of titanium, Mn-ferroalloys, kaolin and potash.

At the same time, Russia controls a considerable share of the global supply of a long list of raw materials. The world, including the EU, depends on Russia to a great extent for certain commodities ? from base metals (steel, aluminium, copper and nickel) to critical raw materials (platinum-group metals, titanium, vanadium, antimony) and fertilisers (potash, phosphate rock).

Share of global raw material production in Ukraine, Belarus and Russia, with red triangles indicating the Critical Raw Materials (CRMs), referring to the EC 2021 List of CRMs. Materials with a share of less than 3% are excluded, and the red dots represent the location of the mining sites of non-Food,non-Energy raw materials in Ukraine (source: S&P Global Market Intelligence).
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Following Russia's military aggression of Ukraine, the uncertainty in international commodity markets of non-food, non-energy (NFNE) raw materials has ramped up with significant and immediate implications in the EU and worldwide. Among the major threats for the EU's security of supply and EU's economy can be identified: 

  • The sanctions affecting the financing of the Russian mining and metal industry and its ability to import raw materials or export finished products will likely disrupt the global and EU supply chains.
  • The targeted export/import restrictions of specific raw materials in the context of additional sanctions from the EU or/and countermeasures from Russia.
  • The commodity price increase due to restricted supply and high energy prices, and the disruption of EU exports to the countries involved in Ukraine-Russia war.

  • Ukraine and Belarus control a considerable share of the global supply for specific raw materials such as potash and titanium.
  • In 2020, Russia, Ukraine and Belarus accounted for 12.3% of total EU imports of the NFNE product group[1]. At the same time, EU exports destined to Russia, Ukraine and Belarus amounted to 3.8% of total EU exports of the NFNE product group. EU imports consist mostly of refined/processed materials and primary raw materials. On the contrary, EU exports principally semi-finished and downstream products.
  • Disruption in steel, aluminium, copper, fertiliser raw materials, and industrial mineral imports from Russia, Ukraine and Belarus could strain severely the supply chains of important industries such as Construction, Transport, Industrial Machinery, Fertiliser.
  • The list of non-food, non-energy (NFNE) raw materials identified as having high import value and share in total EU imports (Figure 1) comprises products required for strategic EU value chains (e.g. PGM for the automotive industry, titanium metal for aerospace applications, electrical steel for electric motors, nickel metal for superalloys in turbines and batteries). Critical raw materials are mainly imported from Russia (Figure 2).
Figure 1: Top-20 products by value in EU imports of NFNE products originating from Russia, Ukraine and Belarus, in 2021 (in bold the CRMs)
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Figure 2: EU imports from the Russian Federation, Ukraine and Belarus of the NFNE product aggregate, by critical & non-critical materials (total values and percentages)
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[1] The product scope excludes manufactured end-use (e.g. batteries containing nickel, catalysts containing platinum), some chemical products (e.g. synthetic rubber), as well as wood and paper products.

Russia supplies multiple non-food, non-energy raw materials (NFNE) and related products (Figure 3). The world, including the EU, depends on Russia to a great extent for certain commodities from base metals (steel, aluminium, copper and nickel) to critical raw materials (platinum-group metals, titanium, vanadium, antimony), and from fertiliser raw materials (potash, phosphate rock) to industrial minerals (magnesite, kaolin, sulphur).

Figure 3: Top-10 commodity groups exported by Russia, by global share in 2019: primary (blue) and refined/processed (orange)
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A recent JRC Technical report, published in 2021, highlights that:

  • Raw materials (non-energy, non food) accounts for more than one third of Ukraine’s total exports of goods (to the rest of the world, as well as to the EU).
  • Three chapters - Iron and steel, Ores and Wood - are contributing with a significant trade surplus to the overall trade balance of goods.
  • The EU was the major destination of Ukraine’s exports of NFNERM, with 42% of them going to the EU in 2018. The top three raw materials exported by Ukraine to the EU were semi-finished products of iron/non-alloy steel and iron ores and concentrates, both agglomerated and non-agglomerated
  • As for NFNERM imports, the EU was the second sourcing country in 2018 (with a share of 22%), after the Russian Federation (36%). In the same year, the top 20 NFNERM imported by Ukraine from the EU included mainly paper and paperboard, but also fertilizers and products of iron/steel.

Additional information for 152 countries (including, Ukraine, Russia and Belarus) are available in the RMIS section raw materials trade flows, as well as in the ECONOMICS AND TRADE module, which includes a series of trade-related country fiches.

New/updated trade-related country fiches are being developed for Ukraine, Russia, Belarus and China, focusing on the most relevant value chains/product clusters for the EU trade and identifying possible shifts towards other trading partners.

Additional analyses can be found in the Material Specific Briefs page.