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Escalating disruptions at some key Russian ports and severe financing challenges are hampering exports of numerous metals either produced in or exported via Russia, and end-users are becoming increasingly concerned about whether shipments will be delivered.
Titanium, ferro-titanium, chromium, ferro-chrome, cobalt and nickel are all particularly exposed to the shipping challenges, with multiple market participants voicing concern about deliveries since Russia invaded Ukraine last week. And those concerns could send Rotterdam prices even higher after yesterday's jumps, which saw ferro-titanium hit $10.60-11.95/kg for both Russian and western grade, while chromium prices increased to $14,000-15,000/t and cobalt hit $35.85-36.40/lb.
Shipping lines Maersk, CMA and MSC — which are together responsible for over half of world shipping containers — all suspended non-essential operations in and out of Russia early this week. Between them they operate 1,965 container vessels out of 6,337 globally, according to shipping consultancy Alphaliner.
Market participants note wide disruptions in the port of St Petersburg, Russia's largest export route for metals. One Russian ferro-titanium trader said they had several hundred tonnes stuck at the port, with their customer unable to get financing to purchase the material.
There were other traders with similar issues in St Petersburg, with material waiting in the port from last week awaiting payment. It is unclear whether the material will be able to ship even if payments go through, because of a lack of shipping containers.
Some companies are also trying to avoid Russian material to some degree, causing delays to shipments of long-term contracts and forcing traders to re-allocate positions.
"We've tried to avoid taking Russian nickel. There's going to be some shuffling units around but consumers haven't been proactive enough, its an ugly situation," a battery metals trader said.
"We have earlier taken steps to reduce our purchases from Russia as much as possible. We will of course comply with the sanctions enforced. We are now looking at exactly what the implications are," a spokesperson for Swedish steelmaker SSAB said.
Chromium and ferro-chrome producers who receive chrome ore from Kazakhstan via Russian transit routes are also concerned. Their suppliers are expected to re-route as some countries impose bans on Russian-origin containers. While not yet under force majeure, one ferro-chrome producer with operations in central Europe and Russia has expressed strong concern about its logistics.
On the receiving end, European countries' import restrictions are also hampering the supply chain. The UK has banned Russian ships from UK ports, causing issues for any importers of titanium scrap, chrome ore or nickel from Russia or central Europe via Russia. Two traders with Russian scrap already on the water to the UK said they do not know whether they can take delivery when it arrives at Felixstowe. Re-routing and finding different ships for the material is expected to add to already inflated shipping costs. Delays are also hampering metal producers and traders, with material now subject to extra checks.
"Rotterdam customs are asking for CMRs [consignment notes] and certificates of origin, and double and triple-checking," a European steelmaker said of their ferro-alloy purchases.