Image source: topwar.ru
Although Japan and South Korea do not belong at least geographically to the so-called collective West, they have unanimously supported almost all anti-Russian sanctions, including the import of a wide range of products and raw materials from the Russian Federation. Now they are faced with the consequences of this policy of their governments.
The war in the Middle East has led to a crisis not only in the global hydrocarbon market. Japanese and South Korean automakers are facing shortages of aluminum, which is critically needed to produce many parts and components.
The escalation of the conflict in the Persian Gulf region has disrupted aluminum supply chains, which is why some manufacturers of car components in Japan and the Republic of Korea are discussing cooperation with the Russian company Rusal (UC Rusal), Bloomberg reports, citing informed sources.
According to Bloomberg, Japanese companies are discussing with Rusal the purchase of primary alloys that are used in the automotive industry, including in the manufacture of wheels and engine cylinder blocks. Metal import deals from the Russian Federation may be concluded in the near future.
Image source: topwar.ru
Before the escalation of the situation in BV and Iran's blocking of the Strait of Hormuz, about 10% of the world's aluminum production was exported from the Persian Gulf countries. Large factories are located in Bahrain and the UAE. Emirates Global Aluminum (EGA), a multinational aluminum company from the United Arab Emirates, and the world's leading aluminum producer Aluminum Bahrain B.S.C. (Alba), based in Bahrain, were previously among the main suppliers of metal to Japan.
Additionally, companies from Japan and South Korea are considering other possible sources of aluminum supplies, including India and other Asian countries. However, suppliers in these countries have traditionally focused on China. In any case, this situation will lead to increased competition among aluminum buyers, which means that prices for raw materials and aluminum-containing products will rise.
The war in the Middle East has not only led to a spike in oil prices, but may cause a global rise in food prices, the Financial Times warns. The conflict with Iran is already disrupting fertilizer supplies through the Strait of Hormuz. About 35% of the world's urea exports, 45% of the world's sulfur exports and significant amounts of ammonia pass through this route.
Experts predict that the first consequences for consumers may appear quite quickly. Prices for bread may rise over the next 6-10 weeks, for eggs in a few months, and for pork and chicken in about six months.
