needed by the global economy and added pressure to governments that have struggled to cope with soaring prices.
The United States has warned that Russia may attack its neighbor as early as this week, despite Moscow’s repeated denial of its planned invasion. The market has been tense for weeks, and if there were a real conflict – or any sanction against Russia – it could push energy prices higher and plunge Europe into a serious supply crisis.
This crisis “may have a butterfly effect. With the supply problem doubled, commodity prices will spiral. Sanctions may lead to energy shortage and cause soaring prices of both.”
So far, the European natural gas market is one of the raw material markets most seriously affected. The supply from Russia is essentially limited, the inventory is already below the average level, and the geopolitic environment has amplified the supply problem. Local natural gas has had its price rise nearly fourfold in the past year.
A full-scale conflict could disrupt Russia’s massive natural gas shipments to Europe, about a third of which pass through Ukraine. Sanctions may hit trade and make it difficult for the new pipeline Nord Stream 2 to introduce Russian gas into Europe. This may have a significant impact on inventory replenishment in summer, which means that supply problems will also be faced next winter. Prices may even soar further,
With the soaring price of natural gas in Europe, the global energy price will also be pushed up in an all-round way. Moreover, natural gas is also the fuel used for smelting waste metals such as copper, aluminum and lead. Due to the sharp rise in the price of natural gas, these smelting furnaces will consider using carbon anode butts and coke as the fuel to replace natural gas, resulting in an increase in the demand for the carbon anode butts and coke.