The German automobile industry suffers from the war in Ukraine. After the coronavirus pandemic and the semiconductor crisis, it is now the turn of the supply and rising costs of other raw materials. All this, without taking into account the explosion in the prices of oil, gas and coal.
Stefan Bratzel, from the Center for Automotive Management, and an expert in the field, believes that “imminent shortages in the supply of important raw materials for car manufacturers and their suppliers should not be underestimated.” “Ultimately, this means higher prices, longer waiting periods for new car customers and slows the rise of electromobility,” he explains.
Neon gas and semiconductor production of Ukraine
Ukraine is one of the most important suppliers of neon gas, the German Association of the Automotive Industry (VDA) told DW. So there could be an impact on European semiconductor production. Furthermore, chips have been in short supply worldwide and have been for some time. High-performance lasers are used in semiconductor production, which, among other things, require neon.
“Raw materials will be even more important in the future,” says a VDA spokeswoman. Palladium and nickel have until now been imported from Russia.
Palladium and nickel, emissions control and batteries from Russia
Palladium is used for gasoline engine catalysts. “With a world market share of 38 percent, Russia is the second most important supplier after South Africa, which has a share of 39 percent,” Michael Schmidt of the German Commodity Agency (DERA) told DW.
The price of palladium has risen steadily since 2015. In June, its price rose to US$2,900 (31.1 grams), then rose to US$1,800, but since the war in Ukraine it has risen again, reaching US$2,270 .
According to Schmidt, “the palladium market has been in deficit for years, and that is not going to change.” The lack of this chemical element, due to the sanctions against Russia, was compensated with the reserves. “But this is not forever. Production in South Africa cannot be increased in the short term and as desired,” according to Schmidt.
nickel more expensive
The nickel price has fallen, but commodity analysts estimate a rise in mid-2022.
“Globally, the Russian Federation is the third largest producer of nickel ore,” said Michael Szurlies of the Federal Institute of Geosciences and Natural Resources (BGR). “Short-term delivery shortfalls are generally difficult to make up for,” he added.
Nickel is important for alloys, but also for the production of lithium-ion batteries. “These, in turn, are of crucial importance for the switch to electromobility, so basically we expect an increase in demand for nickel,” the VDA spokeswoman said.
Higher car prices, more CO2
Sanctions against Russia – which also target nickel production – would cause electric vehicle prices to rise, and slow down the reduction of carbon dioxide emissions, warns London-based consultancy GlobalData.
That argument makes sense: the slower electromobility gets, the more we will depend on Russian oil and gas. “Now is a critical time for the introduction of electric vehicles, as industrialized countries look to accelerate the decarbonization process,” said Daniel Clarke, an analyst at GlobalData.
China, on the other hand, would benefit from the sanctions against Russia by buying its raw materials and, of course, at a lower price.
Western manufacturers, according to Lil Read, an analyst at GlobalData, have only one option: expand trade relations with other nickel-producing countries, such as Indonesia or the Philippines. But the geographical distance would be an environmental problem.
On the other hand, it would increase the dependence on China, since Chinese companies would play a key role in the main nickel mines in those countries.
Read believes that a new battery technology will eventually prevail: “We believe that nickel- and cobalt-free lithium-ion polymer (FLP) batteries will gain popularity and acceptance if the conflict in Ukraine persists.” (YO)
Source: Eluniverso
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