NEXT WEEK—The Ukraine War: Industrial Materials Edition

Russia and Ukraine are key suppliers for two industrial inputs most of us really never think about: neon and palladium. Unless you’re involved in semiconductors or the manufacture of catalytic converters. And if you’re at all connected to the automobile sector, you’re already connected to both. 

Neon is one of the most abundant elements in the universe, but it is remarkably rare in our atmosphere – only about 18 ppm of the air we breathe is comprised of neon. Red, tubular lighting is what many associate with neon, but the bulk of global neon production is used as a buffering agent in the excimer lasers that make semiconductor lithography possible. 

The current global neon supply chain is a convoluted one, but roughly half of the highly purified neon produced in the world comes from Ukrainian suppliers. They in turn refine crude neon produced as a byproduct of Russian steelmaking…and Soviet defense planning (but more on that next week). 

The majority of global palladium production goes to catalytic converters for gasoline engines. It helps scrub hydrocarbons, carbon monoxide and other things we shouldn’t breathe from vehicle exhaust. Of the remaining uses, one of the most important is within semiconductors.  To put it simply, palladium is used to help adhere the pins that conduct electricity on a chip. 

Russia alone accounts for 25% of palladium exports. You can see how markets reacted to the threat of supply losses below:

But what you can also note is what happened to palladium prices as global automobile manufacturing started to grind to a halt in the face of global chip shortages. The global semiconductor industry features a high degree of concentration at various stages of its supply chain, in both raw and intermediate components and manufacturing. 

What happens to chip suppliers if neon supplies remain offline for months? What happens to the global palladium market when demand from its primary users falls due to supply failures elsewhere in their supply chain? How much global supply chain risk is tied to Russia’s invasion of Ukraine, and what blind spots exist in your organization’s planning? 

Please join us next Tuesday, April 5 as we tackle these issues and more in our upcoming webinar The Ukraine War: Industrial Materials Edition. Sign up links and more information below.

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

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