New trade relations important
World commodity market dependent on Russia
04/03/2022, 11:00 a.m
For many countries, Russia is not just a gas supplier. Germany and the world market have long been dependent on Russian exports for other raw materials. Many of them are difficult to replace – new trade relationships are now becoming all the more important.
Russia is not only a major gas exporter for Germany, but also supplies important raw materials for industry. Germany and the world market are dependent on Russian exports, especially for nickel, palladium and chromium, according to a study by the German Economic Institute (IW). These are raw materials that are sometimes difficult to replace.
“Therefore, new trade relations with alternative export nations for these raw materials are essential,” explained the employer-friendly institute from Cologne. Russia is a commodity giant. That is why it is important to continue to advance free trade agreements such as TTIP and CETA with other democracies that are rich in natural resources and are as stable as possible, such as the USA, Canada and South Africa. Analogous to the supply chain problem, it is shown that it is important for a stable security of supply to position ourselves more broadly with raw materials.
According to the IW, it should also be checked “which national and Europe-wide capacities are possible for the mining and further processing of essential raw materials”. A third option includes recycling as a source of secondary raw materials and underlines the importance of the circular economy in Germany and Europe.
Since Russia’s invasion of Ukraine on February 24, the German government has been trying to pave the way for Germany to be less dependent on Russian oil and gas in the future. At first glance, suspending trade relations with Russia seems manageable for Germany, the IW experts write. In the pre-Corona year 2019, Germany only got two percent of its imports from Russia, with a total of seven percent being raw materials.
nickel, palladium, chrome
However, 40 percent of all nickel imports came from Russia. More than ten percent of all worldwide nickel exports come from there. Germany also gets a good 25 percent of its palladium imports from Russia, which is considered the world champion exporter of this raw material, which is so important for the automotive industry. “Palladium is mainly used in the construction of autocatalysts, in the chemical industry and in electrical engineering”. According to the study, the raw material is an important preliminary product for leading German industries.
Russian imports account for more than 20 percent of all German imports of chromium and almost 14 percent of cadmium. “A look at the trade statistics makes it clear that not only Germany but also the world market is dependent on Russia for raw materials.”