Will Fermenting Russia-Ukraine Tensions Impact China’s Silicon Metal Exports?

SHANGHAI, Mar 8 (SMM) - With the escalation of conflicts between Russia and Ukraine, the United States and the European Union are putting increasingly strict sanctions on Russia. Nickel, aluminium, tin and other varieties with high output in Russia have been greatly affected. The will the geopolitical tension influences China silicon metal industry?

China’s silicon metal output and consumption took up around 76% and 60% of the global market respectively in 2021, and is a major exporter of silicon metal. According to historical customs data, China's total silicon metal exports in 2020 and 2021 were 619,000 mt and 778,000 mt respectively, with annual exports to Russia at 24,000 mt and 34,000 mt respectively, taking up 3.9% and 4.4% of China’s total exports in the year. The annual exports to Ukraine were around 1,000 mt, accounting for less than two thousandths of China’s total exports, which was negligible.

According to SMM research, Russia's largest aluminium plant, Rusal, is making normal purchases in China and payments are not affected by the sanctions imposed on Russia. However, even if traders suspend the supply to Rusal amid concerns about the company’s payment capacity in the future, the impact on China's total silicon metal exports will also be relatively small, hence it is unlikely to alter the price trend of domestic silicon metal. If the tensions between Russia and Ukraine continues, Rusal may reduce the production of aluminium-silicon alloys, and in turn lower the import of China silicon metal.