Bulletin: Metals & Minerals
Each week, Weber Shandwick’s APAC Intelligence Bulletin shares the key developments shaping business sectors and markets throughout the Asia Pacific region.
- The combined climate and Ukraine-Russia crises are significantly disrupting the mining and minerals markets in Asia
- The increasing urgency of decarbonisation is shifting market structures while supply fluctuations are driving volatility across a wide range of dependent sectors
- At the intersection of both trends is nickel, which is both seeing greater demand due to sanction-related shortages and is used in a wide range of renewable technologies
- Going forward, markets are aiming to build supply chain resilience and transition to greener processes
Already disrupted by the increased urgency of the climate crisis, Asia’s metals and minerals markets have been exposed to greater upheaval through the ongoing Ukraine-Russia crisis. Sanctions against Russia and related global supply chain challenges have already led to volatility around steel, copper, nickel, lithium, palladium, and other commodities.
Sanctions & climate
In 2021, Russia was the world’s fifth-largest steel exporter. In the same period, the region was also responsible for the third-most coking coal exports, second-most cobalt exports and led the world in global palladium sales. Russia is also thought to have some of the world’s largest natural reserves of lithium, nickel, and copper. While only some commodities have been sanctioned so far, markets for all have been disrupted.
The London Metal Exchange, for example, temporarily halted all nickel trades in March when prices spiked to an unprecedented degree. Construction sector bodies in India and Australia have both recently lobbied their governments for subsidies to manage rising steel and concrete costs. Limited supply of materials like palladium and cobalt is expected to exacerbate the global chip shortage still affecting APAC’s automotive sectors.
Even prior to Ukraine-Russia, the sector was navigating significant transition on account of climate change. Australia’s second wealthiest person is currently shifting investments from iron ore to green hydrogen and renewables. Similarly, an Asia Pacific multinational has recently enlisted an Italian renewable energy company to ensure the brand’s nickel-smelting operations were fully fuelled by wind and solar energy sources.
The nickel conflict
Affected by both sets of obstacles, nickel is currently the dominant topic of concern in metal markets worldwide. Russia is traditionally responsible for a fifth of the world’s pure nickel supplies and sanctions are expected to severely compromise global reserves. Furthermore, nickel is also crucial component in renewable technologies like electric vehicle batteries, complicating sustainability transitions around the world.
A more stable future
The primary response from organisations and governments has been to try and develop more resilient supply chains while exploring new sustainable solutions. One of the world’s leading automotive brands has partnered with two Chinese companies to safeguard nickel and cobalt supplies for electric vehicles. Indonesia, with the largest nickel reserves in the world, is seeing new investment from multiple global partners.
The Indian government, meanwhile, has announced plans to mine for metals affected by the Ukraine-Russia conflict, agreed to a critical minerals partnership with the Australian government, and developed zero-waste processes to transform steel waste into usable products. Multiple startups in China are hoping to leverage the region’s billions of discarded mobile phones to access crucial metals and minerals like cobalt and palladium.
This briefing was prepared by Weber Shandwick’s Insight & Intelligence team in Singapore.
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