Request to Consider Sanctions on Russian Palladium and Titanium
Uncertain Participation in Sanctions Due to High European Mineral Dependence
The United States has requested G7 allies to consider imposing import sanctions on Russian palladium and titanium, Bloomberg reported on the 23rd (local time).
Sources said U.S. officials proposed such sanctions at the G7 deputy finance ministers' meeting held in Washington D.C. the previous day, explaining that the intention is to further tighten the Russian economy as Russia's invasion of Ukraine has surpassed two years. Currently, finance officials from around the world are gathered in Washington D.C., the U.S. capital, to attend the International Monetary Fund (IMF) and World Bank annual meetings.
However, it is uncertain whether the U.S. sanctions proposal will be realized, as both minerals are key resources used across various industries. Palladium is used in computer chips and automotive exhaust gas reduction catalysts, while titanium is utilized in a wide range of applications from aircraft to medical implants. Notably, Russian company Nornickel accounts for 40% of the world's palladium production. Russian firms also supply one-third of the titanium market.
The U.S. has already blacklisted Russian titanium, but still purchases palladium. Europe, which is highly dependent on these two metals, also finds it difficult to readily join the sanctions considering potential disruptions in raw material markets and supply chains. In particular, for G7 member countries Germany, France, and Italy, implementing the sanctions requires the consent of the other 24 European Union (EU) member states.
Bloomberg analyzed, "Western countries have long struggled with ways to sanction Russian metals," adding, "If prices of minerals widely used in the aviation sector, such as titanium, rise, European flagship aircraft manufacturers like Airbus could be impacted." Previously, the UK government announced sanctions on Russian metals excluding palladium in December last year, and at that time, the price of palladium, which was not subject to sanctions, surged by 12%.
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