Bright outlook for steel makers over fears of Ukraine war-led supply crunch

High input costs amidst supply disruptions, and adverse change in output/demand in key markets like China are downside risks

The Ukraine war has caused fears of supply disruptions in industrial metals where Ukraine and Russia are both big players. Although raw material costs will escalate, demand for ferrous and non-ferrous metals is likely to exceed supply, and push up prices. This trend is evident on international commodity exchanges, and producers have hiked prices.

Russia exports iron ore, high grade coal and nickel, all key to steel production. It was the fourth largest steel producer in the world with 73.4 million tonnes per annum (MTPA) (2020) and Russia was also the third largest nickel producer (250,000 tonnes) in the world.