Citigroup: "Russia May Weaponize Aluminum Resources... Concerns Over Sharp Price Surge"

14% Aluminum, 25% Palladium Russian Dependence
Concerns Over Uranium Weaponization Removed from US Sanctions List

[Image source=Reuters Yonhap News]

Global investment bank Citigroup has warned of the possibility of a sharp price surge in the future, stating that Russia may adopt a resource weaponization strategy by restricting exports of metals with significant shares in the international market, such as aluminum and palladium. Concerns have also been raised that if the war in Ukraine prolongs, Russia might even impose export restrictions on uranium, which the U.S. had previously excluded from sanctions against Russia.

According to CNN on the 9th (local time), Citigroup warned in a report sent to investors on the 6th that Russia could pursue a resource weaponization strategy by restricting exports of metals like aluminum and palladium, which hold high proportions in the international market. Russian aluminum accounts for 15% of the international market, and palladium accounts for 25%. If Russia uses the export restriction card, there are concerns that metal resource prices could surge sharply.

The U.S. government also considered imposing sanctions on Russian metals such as aluminum and palladium, in addition to oil and natural gas, immediately after the war in Ukraine began, but excluded them from sanctions due to concerns about the impact on the international market. However, a 200% tariff is imposed on Russian aluminum and its derivatives.

If the war in Ukraine prolongs and Russia pulls out the export restriction card, there are concerns that the prices of these metals will soar, further intensifying the inflation crisis. Max Layton, head of commodity research at Citigroup, said, "Russia raised international oil prices by cutting oil production in response to Western sanctions," and warned, "If the conflict between Western countries and Russia continues, more raw materials will be caught up in sharp price fluctuations."

There are also concerns that if Russia imposes export restrictions on enriched uranium, which accounts for 35% of the entire international market, the scale of damage will be much greater. In the case of enriched uranium, even the U.S. has excluded it from sanctions because Russian supplies account for about half of the market. Especially since uranium is essential not only for nuclear power generation but also for the production of strategic weapons such as nuclear arms, it is expected that the U.S. government will respond sensitively.

This content was produced with the assistance of AI translation services.