MUMBAI: The Russian-Ukraine war could impact global supply chains that are already constrained by the pandemic and the worst would be on the ongoing lack of chip Because warring nations brutally control supplies of the key raw materials that go into making semiconductors, a report has warned.
Since then Russia controls up to 44 percent of the global palladium supply, Ukraine It produces a significant 70 percent of the global supply of neon – the two major raw materials that go into making chips.
Markets can expect global chip shortages if the military conflict continues, said a Moody’s Analytics report on Friday, which began with the pandemic.
Palladium and Neon are two such resources that are the key to the production of semiconductor chips and these chips are required in almost all other industries like automobiles, mobile phones and consumer electronics and many more.
The Russian invasion of Ukraine will fuel even higher oil (oil is already at a nine-year high and hovering around $111 a barrel) and natural gas prices around the world, even if additional supply lines outside Russia However, it affects every oil importing country. report note.
According to the agency, Russia controls 12 percent of global crude oil production, 17 percent of natural gas, 5.2 percent of coal, 4.3 percent of copper, 6.1 percent of aluminum and nickel, 15 percent of zinc. 9.5 percent gold, 5.4 percent silver, 14 percent platinum, 44 percent palladium and 11 percent wheat.
Ukraine, on the other hand, meets up to 70 percent of the global neon demand.
During the 2014–15 Russo-Ukraine war, neon prices increased manifold, indicating how dire this could be for the semiconductor industry.
Although chip makers have stockpiled resources since the 2015 shortage and due to increased demand during the pandemic, chip shortages will affect almost all industries, such as vehicles, if a deal is not struck soon. Manufacturer, Electronic Equipment Manufacturer, Phone Manufacturer. , and many other sectors that are increasingly dependent on chips for their products to work, the report warned.
On the energy front, the worst adverse effects will be felt in Europe, which was mired in an energy crisis even before the Russo-Ukraine war broke out last week, as they hit Russian oil and natural gas supplies, the report said. are too dependent.
The global supply chain has been in a delicate state since the start of the pandemic, and the Russia-Ukraine military conflict will only exacerbate the situation for companies in many industries, especially those heavily dependent on energy resources.
Energy prices in Europe last year were significantly different from oil prices in the rest of the world, partly due to distribution networks in Europe and greater reliance on some major suppliers.
The problem with rising crude oil prices is that it will have a severe impact on inflation which will affect the entire world through energy-intensive goods and services.
Although the US is not directly dependent on Russia or Ukraine for energy, it has significant indirect energy exposure through imports of goods and services from Europe and Asia that are produced using Russian energy.
On the other hand, India and China have more direct exposure to Russian energy, but given the restrictions imposed on Russian exports around the world, countries that continue to contract with Russia will have better bargaining power and prices. is unlikely to suffer from an increase in As a result much more.
Transport is another industry that will suffer from war as transportation has the highest energy intensity of all the major industries.
Even before the war, the pandemic has caused shipping costs to skyrocket by more than 300 percent in 2021 as border and port closures have stuck containers at various ports around the world, and global shipping on the most profitable routes between East and West is focused. ,
While shipping costs have declined from their highs at the end of last year, they remain high and will remain high due to a lack of new containers.
What is certain is that this conflict will feed into the rapidly rising inflationary environment most countries find themselves in, which in turn is expected to result in tightening of central banks, higher interest rates and slower growth, adversely affecting companies and consumers. Chances are, which have no direct relation. The situation is driven by higher prices and interest rates, concludes the report.
Since then Russia controls up to 44 percent of the global palladium supply, Ukraine It produces a significant 70 percent of the global supply of neon – the two major raw materials that go into making chips.
Markets can expect global chip shortages if the military conflict continues, said a Moody’s Analytics report on Friday, which began with the pandemic.
Palladium and Neon are two such resources that are the key to the production of semiconductor chips and these chips are required in almost all other industries like automobiles, mobile phones and consumer electronics and many more.
The Russian invasion of Ukraine will fuel even higher oil (oil is already at a nine-year high and hovering around $111 a barrel) and natural gas prices around the world, even if additional supply lines outside Russia However, it affects every oil importing country. report note.
According to the agency, Russia controls 12 percent of global crude oil production, 17 percent of natural gas, 5.2 percent of coal, 4.3 percent of copper, 6.1 percent of aluminum and nickel, 15 percent of zinc. 9.5 percent gold, 5.4 percent silver, 14 percent platinum, 44 percent palladium and 11 percent wheat.
Ukraine, on the other hand, meets up to 70 percent of the global neon demand.
During the 2014–15 Russo-Ukraine war, neon prices increased manifold, indicating how dire this could be for the semiconductor industry.
Although chip makers have stockpiled resources since the 2015 shortage and due to increased demand during the pandemic, chip shortages will affect almost all industries, such as vehicles, if a deal is not struck soon. Manufacturer, Electronic Equipment Manufacturer, Phone Manufacturer. , and many other sectors that are increasingly dependent on chips for their products to work, the report warned.
On the energy front, the worst adverse effects will be felt in Europe, which was mired in an energy crisis even before the Russo-Ukraine war broke out last week, as they hit Russian oil and natural gas supplies, the report said. are too dependent.
The global supply chain has been in a delicate state since the start of the pandemic, and the Russia-Ukraine military conflict will only exacerbate the situation for companies in many industries, especially those heavily dependent on energy resources.
Energy prices in Europe last year were significantly different from oil prices in the rest of the world, partly due to distribution networks in Europe and greater reliance on some major suppliers.
The problem with rising crude oil prices is that it will have a severe impact on inflation which will affect the entire world through energy-intensive goods and services.
Although the US is not directly dependent on Russia or Ukraine for energy, it has significant indirect energy exposure through imports of goods and services from Europe and Asia that are produced using Russian energy.
On the other hand, India and China have more direct exposure to Russian energy, but given the restrictions imposed on Russian exports around the world, countries that continue to contract with Russia will have better bargaining power and prices. is unlikely to suffer from an increase in As a result much more.
Transport is another industry that will suffer from war as transportation has the highest energy intensity of all the major industries.
Even before the war, the pandemic has caused shipping costs to skyrocket by more than 300 percent in 2021 as border and port closures have stuck containers at various ports around the world, and global shipping on the most profitable routes between East and West is focused. ,
While shipping costs have declined from their highs at the end of last year, they remain high and will remain high due to a lack of new containers.
What is certain is that this conflict will feed into the rapidly rising inflationary environment most countries find themselves in, which in turn is expected to result in tightening of central banks, higher interest rates and slower growth, adversely affecting companies and consumers. Chances are, which have no direct relation. The situation is driven by higher prices and interest rates, concludes the report.