Eastern Europe

Autumn began with an intensification of the geopolitical tensions in the area. A lot of unease was caused by the joint Russian-Belarusian “West-2025” military training exercise held in Belarus during September and by the risks related to it, as well as by the airspace violations that followed shortly afterwards. Poland temporarily closed its only remaining border crossing point with Belarus, causing a lot of public agitation and significant disruption to cargo movements.

As the border was closed for both entering and exiting Poland, and with no clear knowledge of the reopening date, a lot of transport companies were left with the difficulty of having vehicles stuck on either side. After the border was reopened on September 25 and up to the time of writing, it has remained a bottleneck for cargo movements.

Recent drone attacks on Russian oil refineries have impacted gas availability in certain regions, with the authorities having to implement sales limits and price regulations in order to control the situation. Meanwhile, the G7 is set to unveil its 19^th sanctions package against Russia in October, with the preliminary package announcement targeting the energy, oil, military and finance sectors.

On the metals front, copper’s recent gains on the LME have worsened the already-difficult market in Russia where expensive scrap and supplier expectations of further price growth are not correlating with actual demand and sales. Already under significant pressure, aluminium exporters are facing additional difficulties in terms of higher transportation costs.

From October 9, Kazakhstan is implementing export bans on several grades of semi-finished metal products as part of its aim to protect the local market. Market participants fear that the ban could be expanded to include a longer list of metals.

Ukraine’s metals industry remains relatively stable. Brass and aluminium producers are reporting order books secured for several weeks ahead. However, the high price of LME copper is having a negative impact on producer premiums.