Steel is produced from iron ore, but to get from one to the other the ore must first be purified into pig iron (aka crude iron). Enter Russia and Ukraine, who source three-fifths of globally exported pig iron. Throw in Brazil and that fraction becomes four-fifths.
While most countries are heavily reliant on Russian and Ukrainian pig iron to feed their steel foundries, some will feel the effects of supply tightening worse than others. The United States receives over three million metric tons of pig iron from Russia and Ukraine, but also domestically produces over twenty million metric tons a year. Though it won’t be easy, we should be able to offset diminishing supply at least somewhat with increased production capacity. Weaker pig iron producing countries like Italy and Turkey, will have to find a new supplier. Quite a long trip from Brazil to the Mediterranean, assuming one can even find supplies to buy.
In the globalized economic system we live in (for now), the effects of even seemingly small supply disruptions ripple to everyone involved. As we witness the dissolution of this global network of trade (the main focus of my upcoming book, The End of the World is Just the Beginning, we can be sure to see multiple smaller-scale systems take its place. The challenge for the global economy moving forward is that Russia is a top five exporter of a wide array of industrial inputs—not just oil and gas, but iron, palladium, nickel, copper, silicon and more.
Join us on Tuesday, April 5 for our upcoming webinar, The Ukraine War: Industrial Materials Edition, where we’ll take a look at how supply disruptions out of Russia and Ukraine impact global supply chains with a particular focus on metals and minerals.
Can’t make it to the live webinar? No problem! All paid registrants will be sent a link to access the recording of the webinar and Q&A session, as well as a copy of presentation materials, after the live webinar concludes.
Not interested in the whole enchilada? No problem. We will continue to post our analysis and updates on this and other topics related to the Ukraine War. This newsletter and its affiliated videologues are, and always will be, free. New subscribers can sign up here.
Finally, a reminder:
Russia’s strategic shift from thunder runs to a civilian obliteration has already forced ten million Ukrainians from their homes, with nearly four million now living in limbo in foreign lands. All proceeds from all formats of all of our previous books are being donated to the Afya Foundation, a charity which provides medical assistance to refugees from the Ukraine War. The buttons below will direct you to our purchase pages where you can both find out a bit more about each book, as well as select purchase options ranging from e-services to your local bookstore