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Ukraine's conflict drives Japan to look for alternative sources of raw materials

Posted on March 21, 2022   |  

  • Japanese manufacturers are beginning to explore alternatives to Russia in sourcing their raw materials, as worries about supply stability are growing due to the disturbances in production and logistics associated with the country’s special military operation in Ukraine.
  • Russia and Ukraine combined account for 5% of global steel production but due to the invasion production and logistics have been disrupted, which increased supply crises, and steel prices in Southeast Asia and Europe have soared.
  • Global shipping giants AP Moller-Maersk and MSC SA ceased accepting orders to and from Russia on March 1.
  • Open House Architect, which builds wooden houses, halted importing Russian materials in early March. 
  • Russian lumber accounts for about 10% of the imported materials used in the domestic housing market and with the international lumber prices soaring, some have complained of difficulty in finding materials from other regions.
  • Russia is rich in natural resources, and switching from Russia to other markets is costly. Speculative capital has flowed into the global market over problems that supply from the country could drop or even stop, which will push up prices.



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