NEW DELHI (CU)_As Russian government officials and entities are being hit by a wave of sanctions and other restrictions from some of the most developed economies, experts are looking to assess the impact of the crisis in Ukraine on the commodities and manufacturing sectors. Given the significant role played by both Russia and Ukraine in global trade, the ongoing conflict between the two countries are expected to a severe impact on the industries, according to the Indian Steel Association (ISA).
Most commodity and raw material prices are projected to see steady increases, while the supply of steel in the global market is also expected to be affected, with both Russia and Ukraine being net exporters of the product. “The current situation is already getting reflected in higher oil and gas prices, leading to an increased cost of energy. Moreover, commodity and raw material prices will also see a steady increase,” Alok Sahay, the Secretary-General of the Indian Steel Association told PTI. “For example, coking coal prices have further started increasing, which was already at an elevated level. This, in turn, will impact the input cost of production.”
According to the President of the Indian Stainless Steel Development Association (ISSDA) K K Pahuja, stainless steel worth $200 million are available for export from India to Russia, but may not be sent during the current crisis. “And, more than that, whatever material was already in transit or under export the payment may get stuck up… I think at any given time, USD 70-80 million will be stuck in payment. So, there is uncertainty on how that money will be realized,” he added.
On the other hand, countries like China are expected to ramp up their supply to Russia, which means material from Europe and other parts of Asia will become a surplus. They will attempt to find alternative markets like India, as a result, Pahuja pointed out. “That is apprehension…if the exports from the other parts of the world get affected then that material may try to find alternative markets like India and we might have a glut here,” he said.
