Supply chain impacted by Ukrainian conflict
The worldwide supply chain hasn’t recovered from COVID-19 related slowdowns. And now the war in Ukraine is adding to the problems. As well as the obvious issues such as oil & gas supply disruption and high oil prices, materials used in industry, energy generation, electrical, and oil & gas are being impacted. In particular, aluminum and copper markets are under pressure.
It isn’t widely known that Russia produces 6% of global aluminum. The situation in Eastern Europe has sent prices to record highs. Analysts predict these prices will go even higher. And with the price of transportation soaring, too, due to oil prices, it may be some time before aluminum markets calm down.
Russia may not be a major producer of copper, but it provides 7% of the world’s copper wire. Once again, prices are soaring and shortages are beginning to manifest. The price hikes in copper and aluminum will directly impact prices related to any facility or equipment that uses motor drives. About a sixth of the cost of an induction motor, after all, is taken up by copper and aluminum. Further, wind turbines, solar turbines, gas turbines, steam turbines, centrifugal compressors, and energy storage installation make heavy use of both materials. The cost of project development as well as maintenance of existing facilities, then, is destined to rise. Expect, too, project delays or cancellation until the supply chain normalizes.
