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Numerous businesses of steel industry from several nations have decided to boycott Russia in response to Russia’s invasion of Ukraine. This is accomplished on the justification of adhering to trade sanctions imposed by the nation of origin. Their personal desire to minimize financial and reputational risks is another consideration.
On the other hand, given that ASEAN’s trade volume with Russia and Ukraine is very low, the impact of the war on commerce within ASEAN is not particularly significant. Only 0.7% of ASEAN’s total worldwide trade—which totaled USD 3.2 trillion—or $22.1 billion in 2021 will be made up of exports and imports from Russia and the Ukraine.
This image demonstrates how little impact the Russia-Ukraine conflict has on ASEAN Steel Industry. The ASEAN economy, however, is anticipated to be directly impacted by the war.
Impact of the Steel Industry
Many nations have been obliged to reevaluate security threats in light of the conflict between Russia and Ukraine. As a result, those involved in the ASEAN steel sector must hunt for alternate sources of coking coal and semi-finished goods.
Oman, India, Saudi Arabia, and other nations have started to replace steel imports into ASEAN over the previous three years. However, boosting imports from these nations did not instantly address the bottleneck of steel supplies from Russia and the Ukraine.
On the other side, this offers domestic producers a chance to fill the supply gap brought on by the war in both domestic and foreign markets.
The Implication
Steel-based products will be more expensive. It’s because less raw steel and semi-finished steel is being sent to ASEAN and other nations.
Securing raw materials for nations that depend on imports is challenging, though.
Overall, no one benefits from conflict. War will also increase the risk of casualties and postpone the global economic recovery.