The United States financial analyst Blake Griffin, expert in automation systems, industrial digitalization, and off highway-electrification, has published his remarks about the disruptive impact within Motors & Drives.
«The war in Ukraine has rocked global commodity markets. While oil & gas supply disruption and the resulting increase in price continue to dominate headlines, there are a number of other key materials exported by Russia and Ukraine which have been equally disrupted. The disruption of many of these materials will have both direct and indirect impacts on costs associated with producing a motor or drive».
These are the words by the expert, who underlines how aluminium and copper wire supply will be directly disrupted and reports this datum: Russia is responsible for approximately 6% of the global aluminium supply according to CNBC.
«The impact on the supply of key materials is two-fold. First, the economic sanctions placed on Russia will impact its ability to sell various products to its historically largest customers. Second, the physical devastation experienced in Ukraine will impact its ability to produce and ship its key exports. As it pertains the production of motor and drives, the most direct impact stems from the disruption of aluminium and copper supply chains».
Nearly 7% of the world’s supply of copper wire, the same used in induction motors, comes from Russia. This will have an immediate and significant impact on the cost and availability of copper wire used in induction motors.
The motor market had already experienced significant price increases during 2021 as a result of increasing raw material costs. It would appear that price increases are likely to continue into 2022.
The Final Thoughts? «As this war unfolds, we will continue to cover its impact on the markets we cover. Aluminium, copper, and neon are just three areas where this war will impact the production of motors & drives. There are undoubtedly impacts we have not touched on here including increased freight costs on the back of higher diesel prices, steel supply disruption, and the impact on end markets such as mining and oil & gas which are extremely large sectors within Russia and Ukraine. The impacts of this war are far reaching and we have only just begun to bear the consequences of Putin’s ill-intended actions».
