The potential conflict between Russia and Ukraine risks adversely affecting US steel supplies, due to its dependence on pig iron resources from both countries.
According to a report in the UK newspaper The Telegraph, Russia has denied that it has any plans to invade Ukraine - but tensions are high with Russian president Vladimir Putin threatening ‘appropriate retaliatory military-technical measures’ if ‘Western aggression’ continues.
‘’It’s clear Russia has no intention of de-escalating.”
John Kirby, Pentagon spokesman
John Kirby, a Pentagon spokesman stated, ‘’It’s clear Russia has no intention of de-escalating.”
Up to 130,000 Russian troops, alongside 1,200 tanks, fighter jets and long-range missile batteries have massed on Ukraine’s eastern border. The troop build-up has sparked the biggest crisis in East-West ties since the Cold War.
With US steel relying on both Russia and Ukraine for shipments of pig iron (used to produce steel in electric arc furnaces, or EAFs), implications of the conflict would cause losses to supplies, meaning a reduced output in steel.
Argus Media, global news provider, listed strategies which are in consideration, including material alternatives such as direct reduced iron (DRI) and hot briquetted iron (HBI), or outsourcing to different mills. However, not all mills are able to consume DRI and HBI in the volumes required for mass production, and outsourcing to other mills would require a significant amount of effort in terms of transportation solutions.
With new US mills scheduled to open this year, demand for pig iron remains high- making shortages in supply all the more critical to production.
Source: The Telegraph/Argus Media