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Russo-Ukrainian war: Strategic and economic theatres

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  • Russia's economy is 'imploding' as exports to the sanctioned country plummet, economists say

    Russia's economy is collapsing as exports to the sanctioned country plummet in the face of President Vladimir Putin's ongoing, unprovoked war in Ukraine, trade experts suggest.

    The "economy is imploding. We forecast a GDP collapse of -30% by end-2022," Robin Brooks, the chief economist at the Institute of International Finance trade group, tweeted on Sunday.

    Brooks added that data compiled with help from Jonathan Pingle, an IIF researcher, indicated that exports from 20 countries to Russia were down 50% in April compared to the same time a year prior.

    But monthly exports from Russia to other countries were up 64% in April compared to the same time a year prior, Brooks said on Monday, as oil and gas sales become a bigger part of Moscow's revenue.

    Brooks said the country's account surpluses were "massive," which meant Russia was exporting far more than it was importing.

    Russia stopped publishing its trade data after invading Ukraine in late February, so Brooks said the data was compiled using 20 of the country's top trading partners.

    The Observatory of Economic Complexity said Russia's top trading partners include China and Germany.

    Since the invasion, European and Western countries have unveiled a slew of sanctions packages aimed at crippling Russia's economy.

    Ukraine's government has routinely lobbied for harsher sanctions and led a push to try to redirect European Union countries away from Russian gas and oil — a main source of Moscow's federal revenue.
    ________
    Supporting or defending Donald Trump is such an unforgivable moral failing that it calls every bit of your judgement and character into question. Nothing about you should be trusted if you can look at this man and find redeemable value

    Comment


    • I am all for crushing the Russian economy. The somewhat of a majority of people who back Putin (Putin apologists = Trump apologists = same coin) need to learn a lesson the hard way.

      Comment


      • Originally posted by tbm3fan View Post
        I am all for crushing the Russian economy. The somewhat of a majority of people who back Putin (Putin apologists = Trump apologists = same coin) need to learn a lesson the hard way.
        UK and EU have banned insuring any vessel in European waters if the insurers also insure any vessel carrying Russian oil. This vastly reduces Russia's ability to move oil except by pipelines that go to an end user. This is going to kick Modiin the teeth. India has been buying discounted Russian oil, refining it and sending it back to Europe as finished product. That golden goose just got plucked.

        Comment


        • https://www.reuters.com/world/asia-p...es-2022-04-06/

          and the response

          https://www.reuters.com/technology/r...ps-2022-06-02/

          It appears that the next AMD,Intel and Nvidia cards and cpu's will cost their weight in gold. Who wants to replace, upgrade his or hers computer, he or she has a month at best to do so.

          Comment


          • Originally posted by Versus View Post
            https://www.reuters.com/world/asia-p...es-2022-04-06/

            and the response

            https://www.reuters.com/technology/r...ps-2022-06-02/

            It appears that the next AMD,Intel and Nvidia cards and cpu's will cost their weight in gold. Who wants to replace, upgrade his or hers computer, he or she has a month at best to do so.
            It will have an effect, but it will still be a small fraction of variable costs and the very high fixed costs associated with chip fabs means that those chip fabs will likely pay the price to obtain their needed materials supplies, meaning that I expect their price elasticity of demand for noble gasses is very low, is inelastic. It will be other lower value uses that will suffer in the shortage, those exhibiting higher elasticity of demand relative to market pricing of noble gasses.

            Some countries having industries with high value uses for noble gasses may see some strategic value in standing up some increased domestic production capacity for same. It might not be economically viable if there is not also adequate domestic demand for the other gasses. Exclusive of helium (which is largely sourced from natural gas wells), these noble gasses are sourced from separated liquified air, and those nobel gasses are available in similar fractions most everywhere on the planet at similar MSL altitudes, and this separation is a matter of industrial technology (mostly in support of steel production) and energy costs, and is not a matter of any scarcity/availability of domestic reserves of natural resources.

            Originally posted by Royal_Society_of_Chemistry

            Ukraine invasion rattles global supply chains
            by Anthony King
            02 March 2022
            Russia’s war against Ukraine will impact supplies of metals, noble gases and more

            As Russia’s offensive on Ukraine continues, manufacturing activities and exports from Ukraine are severely impaired or have ceased. Russia itself is subject to a growing list of economic sanctions from dozens of countries, and companies with operational links to Russia are evaluating their options.

            Air separation plants attached to Ukraine’s steel mills provide significant fractions of the world’s noble gases – used in lasers and for semiconductor manufacturing.

            London-listed shares of Russian state-owned gas supplier Gazprom tumbled 50% on 28 February, and Shell said it would exit its joint venture with the company. BP committed to selling or writing off its 20% stake in Russian state oil company Rosneft, held since 2013. ‘We are at war and we need to consider those companies as an extension of the Russian state,’ energy expert Thierry Bros at Sciences Po Paris told the Wall Street Journal.

            Meanwhile, the European Commission intends to accelerate plans to wean the EU off its dependency on Russian energy. An imminent new EU strategy is expected to call for a 40% reduction in fossil fuel use by 2030 and further increases in investment for renewables. Energy makes up half of Russian’s exports and a fifth of its GDP.

            Western companies working in Russia are coming under pressure from sanctions and public opinion. German oil and gas producer Wintershall Dea, majority owned by BASF, is involved in three onshore natural gas projects in Russia and the Nord Stream 2 pipeline to bring gas into Europe. The company has condemned the invasion, and will not advance or implement any additional gas and oil production projects in Russia. Wintershall will also write off its financing of Nord Stream 2, totalling around €1 billion (£830,000). The $11 billion (£8 billion) Nordstream 2 pipeline, owned by Gazprom, has been mothballed, while the company in Switzerland overseeing it has filed for bankruptcy.

            With the price of oil hovering around $107 a barrel on 1 March, member countries of the International Energy Agency (IEA) agreed to release 60 million barrels from emergency stockpiles in response to Russia’s invasion. This equates to 2 million barrels a day for 30 days. Russia exports about 5 million barrels a day of crude, roughly 12% of global trade.

            Noble gas supply dissipating

            Ukraine is the largest supplier of noble gases used in chip making, especially neon, of which 90% is used in lasers for etching. Neon, krypton and xenon are all byproducts of the air separation plants that supply large steel mills with oxygen. All three are critical to semiconductor manufacturing, especially high-end chips. Global neon production is around 600 to 700 million litres, with 200 million in the US and 100 million in Europe, says independent consultant Dick Betzendahl. But supply was already constrained, because China shut steel mills to reduce pollution for the Winter Olympics and to suppress demand for iron ore from Australia, he explains. Neon prices tripled in the six months before the war.

            The two major purifiers for Russian and Ukrainian neon are in Odessa, Ukraine, and getting the product there is probably near impossible

            As byproducts of steel production, building capacity for xenon, krypton and neon is very difficult. Supplies also fell because steel demand was lower during the pandemic. Price volatility of these gases means private investors will not risk putting capital into their production. ‘Only China added significant capacity in the last 10 years,’ says Betzendahl, ‘because they want to be self-suficient in these critical rare gases.’

            The electronics industry will struggle to get adequate supplies. ‘Due to the war, Russia and Ukraine are probably producing around 100 million litres of neon, whereas they were producing 200 million prior to the conflict,’ says Betzendahl. ‘A real problem is that the two major purifiers for Russian and Ukrainian product are in Odessa, Ukraine, and getting the product there is probably near impossible.’

            Betzendahl says krypton alone has gone from costing a few cents per litre to $4–5. ‘Everything points to (possibly severe) shortages for krypton, neon and xenon,’ he says. ‘If you run a multi-billion dollar [fabrication plant], you are going to pay any price [for these gases]. They’re going to bid up the prices to get supply.’

            Metals under strain

            Russia is a major exporter of platinum and palladium, important metals in catalysts for vehicle exhausts and elsewhere. The risk of disruption to supply is immense, analyst Natasha Kaneva at JP Morgan told the Financial Times, with Russia accounting for 12% of global platinum and 40% of palladium. High gas prices and tight supply could impact smelters elsewhere, compounding the problem.

            Russia produces around 14% of global aluminium, with Rusal being the world’s top producer outside of China, accounting for 6% of global supplies. Aluminum had sunk to around $1500 a tonne in April 2020, but has been rising steeply since. After the Russian invasion, it reached record highs above $3400 a tonne.

            In its 2020 report on critical raw materials, the European commission noted that Russia produces 22% of the world’s titanium, 20% of the EU’s supply of phosphate rock, 26% of the world’s scandium and 19% of global vanadium. While less critical, Russia also supplies 10% of global nickel, 4% of cobalt and over 3% of copper.

            According to a US Geological Survey report from 2018, Ukraine was ‘likely to remain one of the world’s leading producers of manganese ore, titanium ore and titanium sponge.’ The equivalent report for Russia noted that the country is a global leader in many metals and industrial minerals.

            The war has already impacted some industry supply lines. Car maker Volkswagen responded to the invasion by shutting two factories in Germany for a few days.Specialist suppliers from Ukraine, including Leoni and Nexans, provide automakers across Europe with electric wiring for cars. The world’s three largest shipping companies – Maersk, MSC Mediterranean and CMA CGM – are to temporarily stop delivering cargo to and from Russia.

            Meanwhile, biotech leaders published an open letter pledging to cease investing in Russia, reject investment from Russian funds, stop collaborations and service agreements with Russian companies and halt trade in goods with Russian companies (except for food and medicines). The pressure to isolate Russia is likely to escalate so long as the war continues.
            .
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            Comment


            • It will have an effect, but it will still be a small fraction of variable costs and the very high fixed costs associated with chip fabs means that those chip fabs will likely pay the price to obtain their needed materials supplies, meaning that I expect their price elasticity of demand for noble gasses is very low, is inelastic. It will be other lower value uses that will suffer in the shortage, those exhibiting higher elasticity of demand relative to market pricing of noble gasses.

              Some countries having industries with high value uses for noble gasses may see some strategic value in standing up some increased domestic production capacity for same. It might not be economically viable if there is not also adequate domestic demand for the other gasses. Exclusive of helium (which is largely sourced from natural gas wells), these noble gasses are sourced from separated liquified air, and those nobel gasses are available in similar fractions most everywhere on the planet at similar MSL altitudes, and this separation is a matter of industrial technology (mostly in support of steel production) and energy costs, and is not a matter of any scarcity/availability of domestic reserves of natural resources.
              Great point, JRT.

              And once a nation makes the decision to bear the cost burden, what will that mean for market share? Will that further down the road hurt Russia if they permanently lose that market share? Time will tell.
              “Loyalty to country ALWAYS. Loyalty to government, when it deserves it.”
              Mark Twain

              Comment


              • https://www.anews.com.tr/world/2022/...ssia-for-trial

                1000 Ukrainians sent to Russia to face trial?
                Foreign fighters in Ukrainian service classified as “mercenaries”,
                meaning that they fall outside Rules of War and Geneva Convention, or am I wrong?
                That plus floating that neo-Nazi buzz word.
                Maybe time for some media heavy show trials?

                When we blindly adopt a religion, a political system, a literary dogma, we become automatons. We cease to grow. - Anais Nin

                Comment


                • Originally posted by Amled View Post
                  https://www.anews.com.tr/world/2022/...ssia-for-trial

                  1000 Ukrainians sent to Russia to face trial?
                  Foreign fighters in Ukrainian service classified as “mercenaries”,
                  meaning that they fall outside Rules of War and Geneva Convention, or am I wrong?
                  That plus floating that neo-Nazi buzz word.
                  Maybe time for some media heavy show trials?
                  They were issued Ukrainian citizenship when they joined. They are at worst dual national.

                  Are they mercenaries in any sense of the word?

                  You tell me...were the American Eagle pilots who joined the RAF mercenaries? Was the Lafayette Escadrille mercenaries? Was the Czechslovak Legion which fought for the Russian Empire in World War 1 Mercenaries?
                  “Loyalty to country ALWAYS. Loyalty to government, when it deserves it.”
                  Mark Twain

                  Comment


                  • Originally posted by Albany Rifles View Post

                    They were issued Ukrainian citizenship when they joined. They are at worst dual national.

                    Are they mercenaries in any sense of the word?

                    You tell me...were the American Eagle pilots who joined the RAF mercenaries? Was the Lafayette Escadrille mercenaries? Was the Czechslovak Legion which fought for the Russian Empire in World War 1 Mercenaries?
                    …or the Chechen, Syrian and African mercenaries that Russia has recruited to bolster their forces in the Ukraine!
                    The foreign fighters that have fallen into Russian hands were issued Ukrainian citizenship by a nation that Russian refuses to acknowledge.
                    I guess that in their twisted logic it entitles Russia to treat them as “terrorists”!
                    Proof of the pudding:
                    Three foreign fighters sentenced to death!!!


                    https://www.dw.com/en/ukraine-foreig...tes/a-62069822


                    I guess it was time for some kangaroo show trials!!!!
                    It does make one wonder of the fate of the Ukrainians; combatants and non-combatants alike) that have been taken back into Russia!

                    When we blindly adopt a religion, a political system, a literary dogma, we become automatons. We cease to grow. - Anais Nin

                    Comment


                    • Originally posted by Amled View Post
                      It does make one wonder of the fate of the Ukrainians; combatants and non-combatants alike) that have been taken back into Russia!
                      I ain't wondering. I think I know.
                      “Loyalty to country ALWAYS. Loyalty to government, when it deserves it.”
                      Mark Twain

                      Comment


                      • US plans to build silos on he Ukranian border to facilitate the shipping of grain. This won't solve the problem, as transport links/capacity are going to be an issue, but it will help. This way it will be possible for Ukranian transport to offload grain & turn around for more, rather than needing to immediately co-ordinate with transport on the other side. Ideally transport to Romania & then to their ports or ones further south, but I don't assume it will be anything like that easy.

                        https://www.theguardian.com/world/20...in-food-prices
                        sigpic

                        Win nervously lose tragically - Reds C C

                        Comment


                        • https://www.bbc.com/news/world-europe-61825525

                          “Russia did not invade the Ukraine!!!”
                          This piece of pure unmitigated bullshit was spouted by Russia’s Foreign Minister, a very straight faced Sergey Lavrov in a BBC interview.
                          He continue by declaring that Russia had to “intervene with a Special Military Operation” to protect the Russian speaking minority in the Ukraine!
                          Yahh right!!!
                          Tell that to the Russian speaking Ukrainians buried under bomb rubble in cities like Kharkiv, Mariupol and the cities and towns of the Donbass.
                          “…We’re here to save and protect you. Sorry we had to kill you to do that!!!”…
                          When we blindly adopt a religion, a political system, a literary dogma, we become automatons. We cease to grow. - Anais Nin

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