Belgium, (Brussels Morning Newspaper)The German Economic Institute (IW) think tank has warned that Germany depends on Russia to supply it with metals.
While the discussion about EU’s dependency on Russian imports has focused largely on energy, IW stressed that the German economy also depends on raw material imports from Russia, according to DW reporting on Monday.
Data from the MIT Economic Complexity Observatory shows that Russian imports accounted for 39% of Germany’s supply of nickel in 2020, which is used in production of steel and batteries, among other.
Russia also accounted for roughly one quarter of German palladium imports in 2020, between 15% and 20% of cadmium and chromium, roughly 11% of copper, 10.9% of platinum and 8.5% of iron ore.
IW stressed in a statement that “new trade relations with alternative export nations for these raw materials are essential” for Germany.
It pointed out that Russia is the largest exporter of nickel, providing approximately 20% of the world’s class 1 nickel, the purest form of the metal.
Demand on the rise
Demand for nickel has been rising in recent years, largely due to rapid growth of electric vehicle production. US Tesla electric vehicle manufacturer CEO Elon Musk previously warned that nickel supply is a bottleneck in the production of “high-volume long-range batteries.”
In the last two years or so, class 1 nickel prices have doubled, with the war in Ukraine sparking fears that Russia could limit export. Nickel prices peaked at the start of March this year and have increased roughly 400% this year alone.
Analysts expect the conflict in Ukraine to continue destabilising the global market, predicting that the nickel crisis alone will increase the cost of new electric automobiles by at least US$ 1,000.
The German Association of the Automotive Industry (VDA) industry group warned that the war will have negative effects on carmakers in Germany. “In the long term, the car industry is facing shortages and higher prices of raw materials,” VDA stressed in a statement.
The EU announced measures targeting Russia on Friday, including bans on import of caviar, cement, coal, rubber, vodka and wood, but the list did not include metals and other materials and goods exported to the bloc.