Raw materials – lithium from Chile, gas from Russia – knowledge

Frankfurt / Main (dpa) – For decades, Germany has benefited from free world trade, which has provided access to cheap products and raw materials.

The consequences of dependence on outside supplies were already apparent in the corona pandemic. Supply chains were broken, important raw materials became scarce. The Ukraine war further aggravated the “made in Germany” situation.

Car industry:

There are many different raw materials and primary products in cars. For light metals aluminum and magnesium, for example, China and Russia have particularly high market shares, the Russian group Rusal is considered the largest single supplier of aluminum. The Russian Federation is just as powerful as the supplier of the precious metals palladium and platinum, which are needed for catalytic converters. Steel is also an indispensable resource in the construction of automobiles and engines. Conventional iron ore often comes from various major manufacturers such as China, Brazil, Australia or India. In the case of special steels with chromium, titanium or nickel components, the dependence on certain sources may be higher. With Norilsk Nickel, Russia has one of the leading nickel producers.

Nickel is also used in many types of batteries, such as cobalt, manganese and copper elements. In electric car battery cells, current flows through charged particles (ions) of alkali metal lithium, which currently comes from Australia, China and Chile. A number of other metals or metal compounds are used for batteries and power electronics in vehicles. A central supplier product are semiconductor modules and microchips based on silicon or germanium. They have been lacking in many countries since the Corona crisis. Here, Europe’s industry – as with battery cells – wants to become more independent of previously dominant manufacturers from Asia. Moreover, cars without a lot of plastic for the interior are unimaginable. Mixtures of oil and natural gas are required for the production of plastics.

Mechanical engineering:

The product range ranges from agricultural machines to forks and machines for the food industry. Therefore, the need for preliminary products and dependence on supplier countries is very different. An important material is steel, which many companies do not buy directly from the manufacturer, but through wholesalers. Narrow gorges in the steel market as a result of the war in Ukraine are clearly felt by machine builders. “Companies that need steel for a current project are particularly affected. In some cases, they are no longer even given the price or delivery time,” reports Bianca Illner of the VDMA mechanical engineering association. Microchips, which are found in control elements and often come from China, are also essential for many mechanical engineers. According to a VDMA survey, three-quarters of companies are testing their supply chains after their pandemic experiences. For example, they target a wider network of suppliers. A different geographical distribution of suppliers also plays a role in many companies.

Pharmaceutical chemistry:

The German chemical and pharmaceutical industry consumes large amounts of gas and oil: According to the German Chemical Industry Association (VCI), it uses 2.8 million tonnes of natural gas as a raw material and 99.3 terawatt hours of natural gas to produce steam and electricity each year. In addition, the industry requires over 14 million tons of oil as a raw material. Therefore, there is great concern about an energy embargo against Russia. “In all companies, teams and crisis management teams are now working every day to examine the specific situation of the power supply, to analyze different scenarios for the reduction of natural gas supply and to make preparations,” said the Director. VCI Manager, Wolfgang Große Entrup. . The association notes that energy consumption per unit of output has halved since 1990.

According to the latest figures for 2020, the most important importers of chemical products were the Netherlands, Belgium and France. Russia is in 18th place with a percentage of 1.3 percent. Non-fossil raw materials in the value chain are important for building a climate-neutral economy, such as rare earths, lithium, nickel or phosphorus. The industry is dependent on China (rare earth), Chile and Bolivia (lithium) and Kazakhstan (phosphorus).

electrical industry:

The German electrical and digital industry is closely involved in the international movement of goods. Last year, exports worth 225 billion euros were offset by imports worth 222 billion euros, according to industry association ZVEI. At around 80 billion euros, this includes primary products, most of which come from the EU (31 billion), Asia (24 billion) and the US (5 billion). Preliminary products from Russia, Belarus and Ukraine amounted to less than one billion euros, so the direct losses of the war matter little.

Strong dependence on semiconductors from Asian factories was already evident during the coronary crisis. ZVEI supports funding projects to increase the production of these components in Germany and Europe. As of November, 70 percent of companies reported in an association survey that they wanted to diversify their supply chains for raw materials. In addition, 65 percent wanted to expand their storage. The situation has worsened again with the war in Ukraine: Currently, more than 60 percent expect distribution problems, among others, for metals, wood and chemical products to worsen again.

Energy:

According to the Working Group on Energy Balances, about 71 percent of energy demand came from abroad in 2021. The share of imports was 98 percent for mineral oil and 95 percent for natural gas. The most important sources of domestic energy were renewable energy and lignite. Solid coal, on the other hand, is no longer mined in Germany and must be imported 100 percent.

“Germany is highly dependent on Russian energy imports,” the Federal Ministry of Economy said in early April. 35 percent of oil consumption, 50 percent of coal consumption and 55 percent of natural gas deliveries came from there in 2021. Due to the war in Ukraine, Germany now wants to become independent of Russian energy supplies . In the case of coal, this should be achieved by the autumn, and in the case of oil by the end of 2022. Economy Minister Robert Habeck (Greens) hopes to become “largely independent by mid-2024” in the case of Russian nature gas.

Mining:

Germany takes construction raw materials such as sand and gravel or natural stones as well as various industrial minerals such as rock salt or quartz sand from domestic deposits. “Even globally, Germany is still an important mining country,” according to the Federal Ministry of Economy. In 2019, Germany was the third largest producer of raw kaolin, the fourth largest producer of rock salt and the fifth largest producer of potassium salt.

For metals and many industrial minerals, however, Germany is highly dependent on imports. For example, iron ore for German pig iron production is imported exclusively. According to the Federal Institute for Geosciences and Natural Resources (BGR), the demand for chromium, manganese or molybdenum iron alloys for the stainless steel industry is covered almost entirely by imports. However, dependence on imports is significantly reduced by recycling and purchasing scrap and waste.

© dpa-infocom, dpa: 220426-99-44058 / 2

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