War Ripples Continue

The Ukraine war has disrupted supply chains. Some estimates note that 90% of steel capacities are not operating now. Some enterprises are trying to resume production and increase volumes, but it is difficult due to downtime of other plants in the supply chain. In particular, most coking plants have stopped production.

In 2021 Ukraine imported from Russia 8m tons of coking coal. The share of Russian supplies in the Ukrainian domestic market was 43% and substitution of coal supplies from Russia is challenging.

The war led to the cessation of iron & steel supplies not only from Ukraine, but also from Russia. The segments of pig iron and semi-finished products felt the most negative impact of the war. In 2021 EU imported 22.4% from Russia and 29.4% from Ukraine. USA imported 34.3% of pig iron from Russia and 28.5% from Ukraine.

At a recent roundtable between manufacturers and contractors, issues surrounding schedules and timelines revealed the war’s negative impacts. Shipment dates are continuing to be pushed back leading to extending delivery times of metal products. Some customers are now experiencing a 40-week delivery of materials including approval drawings. It is often taking 17-20 weeks to get permit drawings, and manufacturers have gone on supply allocations.

War creates challenges for all participants in the global economy with disruptions in supply chains, decreasing production volumes, and rising prices.

In response, International Ventures has strengthened its supply channels with Mexican manufacturers operating on a 12-18 week time frame for material delivery.