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The Russian Rusal group is the world's second largest aluminum producer and operates electrolytic furnaces in Siberia, among other places
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The panic in the executive floors of the car manufacturers was great when the escalation of the Ukraine war caused a price rally on the commodity markets at the beginning of March.
In addition to the missing chips and wiring harnesses, bottlenecks in raw materials were now also threatening.
Prices of many key industrial metals needed to make cars, such as nickel, palladium and aluminum, rose to record levels.
"We see an increase in the cost of raw materials and energy, which will put pressure on the business model," said Stellantis boss
Carlos Tavares
(63).
The next crisis for the auto industry was imminent.
It is now apparent that the big tremor in the raw materials for Stellantis, Volkswagen and Co. will not materialize for the time being.
The supply situation for industrial metals has eased again;
instead of further price jumps, there were price falls on the raw material markets.
On the London Metal Exchange LME, which had even suspended trading in nickel in the meantime, the nickel price has fallen by 12 percent since the end of the first quarter, aluminum costs around a quarter less and even the price of the critical raw material cobalt has fallen by 10 percent .
This means that nickel is around half as expensive as a year ago, and the price of aluminum has almost returned to the previous year's level.
The alarm mood in terms of raw materials has subsided somewhat among car manufacturers.
"We currently do not see any supply risks affecting our vehicle production as a result of the Ukraine crisis," says a Volkswagen spokesman.
The BMW Group makes a similar statement: "We have secured the procurement of raw materials (including electricity and gas) in the long term."
Renault says it is not directly affected by the conflict in Ukraine because the carmaker has no direct suppliers there.
Stellantis emphasizes that it has learned the lessons from the Covid and semiconductor crisis.
According to their own statements, BMW and Volkswagen have hedged against fluctuations in the price of raw materials.
What effects this can have was already apparent in the first quarter.
Surprisingly, Volkswagen reported a positive effect of 3.5 billion euros resulting from the hedging transactions.
Due to the long-term security, the group still paid prices as before the Ukraine war, the difference made for the book profit.
According to the group, this special development should not continue in the further course of the year, the operating return will move back towards the level forecast for 2022.
Other crises prevent the raw material crisis
The fact that Russia is an important supplier of many raw materials for the auto industry seems to be of less concern to car manufacturers at the moment.
A fifth of the high-quality nickel used to refine steel products and to manufacture batteries for electric cars, for example, comes from Russia.
In the case of aluminum, which is mainly used for the body, it accounts for 6 percent of global production.
About half of the global demand for palladium comes from Russia and Ukraine – 70 percent of which goes to the automotive industry.
According to metals and mines analyst Alice Yu
of S&P Global Insights , what is keeping metal price increases contained for the auto industry are
other crises.
"Due to inflation and China's zero-Covid policy, demand is falling and supply is picking up somewhat in the short term," Yu says.
In the short term, a slight surplus is therefore even forecast for most commodities.
Only in a few years would the markets move towards deficits again.
The two-month lockdown in China had significantly reduced global hunger for raw materials.
Numerous factories were idle in the economic metropolis of Shanghai and other cities, and around three percent of the world's container freight capacity was recently backed up in front of the world's largest port in Shanghai.
There were production stops in car factories worldwide.
According to an Ifo survey in May, 90 percent of the German companies in the automotive industry surveyed were waiting for primary products from China.
At the same time, demand fell due to inflation.
In the euro zone, it recently climbed to 8.1 percent and in the USA to 8.3 percent.
Cobalt shortages persist
Expert Yu currently sees major bottlenecks in cobalt in particular.
Like lithium and nickel, the metal is an important raw material for batteries.
"The outbreak of war has further exacerbated the scarcity in the cobalt market," Yu says.
Russia contributes only around 4 percent of global cobalt production.
But the failure exacerbated the already tense situation.
Even before the war, less cobalt was being delivered from South Africa - first for logistical reasons, now because of flooding.
These had caused major damage in the coastal city of Durban, which is an important port for cobalt exports.
From there, the Democratic Republic of the Congo, by far the world's largest producer of cobalt, exports the raw material.
The state accounted for more than two-thirds of global cobalt production in 2021.
Overall, Yu expects low production of electric vehicles in 2022 and 2023 and therefore lower demand for lithium and cobalt.
This is already dampening the price increase.
Goldman Sachs analysts
Nicholas Snowdon
and
Aditi Rai
even expect the price of cobalt and lithium to fall in the short term, i.e. within the next two years, as they wrote in a statement at the end of May.
An escalation on the commodity markets is currently unlikely.
But if there is one lesson from the past few years, it is this: the next crisis will definitely come.
