Page 39 - bne IntelliNews monthly magazine October 2024

bne October 2024 Cover story I 39
European commodities production and import data 2023
away. The EU initially included Russian fertilisers in its fifth sanctions package in April 2022, but quickly dropped the idea as unworkable. Projections suggest that Russian fertiliser exports could reach 44mn tonnes by the end of 2024, marking a 10% increase from 2023.
Uranium: Likewise, the US recently “banned” the import of Russian uranium; however, as the US doesn’t produce any enriched uranium of its own to speak of, a system of waivers was introduced in parallel with the sanctions that allow US firms to continue to import Russian uranium until 2028. The US is at least five years away from becoming self-sufficient in the nuclear fuel.
Globally, Kazakhstan leads in the mining of uranium, but enrichment
is currently dominated by a few key players. Russia holds about 40% of the global enrichment market, primarily due to its state-owned company, Rosatom. Other major players include Urenco in Europe and Orano in France, which account for about 12% of global enrichment capacity. The US currently produces only a small fraction of
its needs domestically, relying on imports for around 30% of its enriched uranium, but recent efforts aim to expand domestic production.
No decision had been made at the time of writing, but even if Putin doesn’t
use uranium as a tit-for-tat political weapon, the threat highlights Russia’s monopolistic power in the international commodities markets.
Tech race
Draghi’s report puts technology prowess at the heart of his proposed solution to Europe flaccid growth. And it needs to be. The cost of production in Europe
is twice as high as in the US and over three times more than in China, but the EU is badly trailing behind both the US and China on innovation, and China is rapidly catching up with the US.
“The report proposes a fundamental reform of the innovation lifecycle
in Europe: from making it easier for researchers to commercialise ideas, to
Commodity
EU Production Volume
EU Import Volume
Import Value (€)
Import Share (%)
Crude Oil
Natural Gas (inc LNG)
Coal
Soybeans
Palm Oil
Coffee
Cocoa
Sugar
Timber
Steel
Titanium
Aluminium
Electronic Components
Fertilisers
~20mn tonnes
~50bn m3
~60mn tonnes
~2.5mn tonnes
Minimal
Minimal
Minimal
~20mn tonnes
Significant domestic
~160mn tonnes
Minimal (mostly imported)
~7mn tonnes
Limited
~17.3mn tonnes
~425mn tonnes
~330bn cubic metres
~140mn tonnes
~15mn tonnes
~7mn tonnes
~3.5mn tonnes
~2.5mn tonnes
~3mn tonnes
~5mn cubic metres
~36mn tonnes
~13,000 tonnes
~5.5mn tonnes
Significant imports
~10mn tonnes
€22.9bn (Q2 ~95% 2023)
€150bn
~85%
~€16bn ~70%
~€3bn ~86%
~€3bn ~95%
~€4bn
~€6.5bn
~100%
~100%
~€2bn ~13%
~€8bn
~€40bn
~20%
~18-20%
~€1.8bn ~90%
~€10bn
~€50bn
~€12bn
~45-50%
~85%
~30-35%
Source: Eurostat, European Commission (EC), Centraal Bureau voor de Statistiek
Fertilisers: Russian fertiliser sales to the EU are also booming as Europe has few alternative sources. From January to May 2024, Russia exported 1.9mn tonnes of fertilisers to the EU, driven largely by high natural gas prices
that have forced European chemical factories to reduce their own fertiliser production.
Fertilisers remains a business dominated by Russia and Belarus. Previously Europe imported a third of its fertiliser needs, but as gas is
a major input and gas prices have soared, Europe’s own fertiliser makers were amongst the first heavy industry facilities to shut down during the energy crisis of 2022. In 2022, the value of fertiliser imports reached approximately €12bn, with imports making up
about 30-35% of the total fertiliser consumption in the EU. The list goes on.
The demand for Russian nitrogen fertilisers rose by 39%, amounting
to 1.1mn tonnes during the first five months of 2024. Poland emerged as the largest importer, accounting for 25%
of these imports, followed by France (12%), Germany (11%) and Italy (10%). In addition to nitrogen fertilisers, there was a significant increase in the import of potash and complex fertilisers. Potash fertiliser imports from Russia to the EU quadrupled to 182,500 tonnes, while complex fertilisers saw a twofold increase, reaching 619,600 tonnes. The EU has accounted for approximately 20% of global fertiliser imports over the past five years.
Historically, Russia has supplied about 13% of the EU's fertiliser imports between 2018 and 2021. Although this share dipped to 8-9% in 2022-2023, recently they have started to grow strongly as the EU’s own production falls
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