Maxim A. Suchkov
Maxim A. Suchkov

@m_suchkov

19 تغريدة 83 قراءة Mar 07, 2022
The conflict in #Ukraine is a collateral damage of a massive #US-#Russia crisis that has been brewing for years. Now that the conflict penetrates every political, economic and social level regionally and globally, it’s important to see what comes next. LONGISH THREAD.
I’m an academic,not my job to advise govs/ companies,but analysis of most global consultancies gets increasingly biased.Mine probably too.But I'd present the other side of the picture from what people get from MSM dominated discourse of things in #Ukraine &costs #Russia shld bear
1/ So, the new drastic sanctions on RUS were slapped & will hurt, esp in the long run. Numerous literature on it. Many talk about how energy markets will be effected, so I’m gonna skip this & say a few things about other, less discussed yet very important domains.
2/ Following sanctions on #Russia’s @Aeroflot_World & airspace,RU closed off its skies for Europe – they gotta take a detour. Shares of most EUR airlines fell from -6% to -32% due to increased costs.
Finnair doing particularly bad but not just that
ft.com
3/ A lot of rejoicing over how RUS planes that were on lease are seized, but there’re a lot of drawbacks on this as well, as I mentioned earlier
4/ #Moscow advises chemical enterprises to suspend export of methanol derivatives to Europe due to logistical issues.Methanol is raw material for pentaerythritol & urotropine. Share of RUS manufacturers in the EU market is 40% (pentaerythritol) and 50% (urotropine).
5/ Without going into scientific details - Europe’s polymer market will down the same pipe as the aviation.
Agriculture - #Russia will suspend the export of fertilizers to EUR until “normal transportation is resumed and deliveries are guaranteed”.
6/ Russia's Trade Ministry says that due to the sabotage of deliveries by some foreign logistics companies, farmers both in Europe and in other countries cannot receive the necessary volumes of fertilizer.
What is means is that..
.. on the eve of the sowing season, European (& American) farmers are left w/t Russian fertilizers. RUS share in the world market is a little less than a 1/3 of the world production of potash fertilizers, about 10% of nitrogen fertilizers & about 20% of complex fertilizers.
7/ How to fill the gap? The issue coulda been solved by fertilizers from #Belarus but it’s also under sanctions. In Ukraine, the sowing campaign is disrupted. That is, in 6 months the world food market, in particular wheat, has high chances of collapsing.
8/ #Russia is the world leader in the wheat market & what #US now does it seeks to cut RUS exports - this will only aggravate the situation.
The logistics is destroyed - impossible to take RU wheat to Europe. But it’s easy to take it China & they need a lot of it.
9/ BTW, once the sanctions were slapped, #India was smart enough to ensure the business with #Russia over fertilizers was done in bilateral curriences. So the East here exposes a smarter approach than the West. Not surprising.
10/ Semiconductors & computer chips are also interesting.
Today, #Russia accounts for 80 % of the market for sapphire substrates - thin plates made of artificial stone, which are used in opto- & microelectronics to build up layers of various materials, such as silicon.
They are used in every processor in the world - AMD & Intel are no exception.#Russia's position is even stronger in special chip etching chemistry using ultra-clean components. RUS accounts for almost 100% of the world's supply of some rare earth elements used for these purposes
12/ Other echoes:
Gas prices going up, just as Moscow expected them to:
aljazeera.com
Diesel getting expensive: theportugalnews.com
Energy bills in Europe rising: reuters.com
I dont rejoice any of this – people will lose jobs,have to live harder lives.Neither do I underestimate the gravity of the situation for RUS’s own economy.This is to say that next time you hear ppl say "Russia is a gas station w/ nukes" -judge yourself
13/ #Europe will lose in any case. #China is mixed bag.
#US likely a winner from this crisis - it’s role of a Western leader stronger,it benefits economically from Europe’s militarization & sanctions on #Russia. US, it profits from the conflict like it did from both WWI & WWII.
But the departure from US dominant world will be faster, so is the de-dollarization. US domestic integrity is also weak & this will be exploited. Regardless of how UKR settled, US-RUS standoff will continue & take dramatic forms – hopefully non-military.
/END

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