Industry Focus

Analysis on Russian
Fastener Tradein 2021-2022

Introduction
Since Russia’s unprovoked and unjustified
invasion of Ukraine in February 2022, the EU
Council has adopted 10 packages of sanctions
against Russia and Belarus. The sanctions
aim to weaken Russia’s ability to financethe war and specifically target the political,
military and economic elite responsible for theinvasion. Economic indicators are showingthat the restrictive measures taken in Europe
and elsewhere against Russia have had animpact on the Russian economy.

The Russian Economy isShrinking

Article by Behrooz Lotfian
Copyright owned by Fastener World

Declining Trade
The restrictive measures target the import of certain goods from Russia and theexport of certain goods to Russia. The list of banned products is designed to maximise
the negative impact of the sanctions on the Russian economy while limiting theconsequences for EU businesses and citizens. Statistics are proving that the restrictive
measures are yielding results. Both the World Bank and the IMF estimated that in
2022, Russia’s trade in goods and services was set to decline significantly.

Russia’s Fastener Export Data Before the War

A c c o r d i n g t o t h e Wo r l d B a n k , t h e
International Monetary Fund (IMF) and theOrganisation for Economic Cooperation andDevelopment (OECD), 2022 was a bad year for
the Russian economy. It was estimated that in
2022, Russia’s gross domestic product (GDP)dropped by 2.1%. Russia’s economy may
continue to shrink in 2023. Its GDP is forecast
to decline by 2.5% in the worst-case scenario
or by 0.2% according to the World Bank. The
IMF, however, expects growth (0.7%) in 2023.

ExportDestinations

Feb.
2021

Mar.
2021

Apr.
2021

World

8,391

11,679 10,809

Kazakhstan

2,191

2,271

Belarus

1,022

UkraineGermany

There is no clear statistics in Russian fastener industry. The following table shows
the statistics of fasteners exported from Russia before the war.

The World Market: The exports to the world market show some fluctuations
throughout the year, peaking in March 2021 (11,679 thousand USD) and reaching thelowest point in January 2022 (6,769 thousand USD). Despite the fluctuations, there wasa general upward trend until around October 2021, followed by a decline in exports inthe last two months (December 2021 and January 2022).

Kazakhstan: Exports to Kazakhstan experienced growth in the first quarter of 2021,
with the highest value in March (3,828 thousand USD). Afterward, there was a decline
until around September 2021, followed by some recovery in the last few months.
May
2021

Jun.
2021

Jul.
2021

Aug.
2021

Sep.
2021

Oct.
2021

Nov.
2021

Dec.
2021

Jan.
2022

8,855 10,494

9,582 10,267

10,14910,514 10,077 10,854

6,769

3,828

2,677

3,681

2,538

3,172

3,215

2,952

2,683

3,391

2,036

1,710

2,056

1,615

2,258

2,168

2,371

2,051

1,867

2,030

2,062

1,536

427

294

305

308

476

644

384

502

344

307

415

457

570

512

598

469

539

487

469

613

669

607

674

445

Note: Numbers in thousand USD

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Fastener World no.202/2023 惠達雜誌Industry Focus
Belarus: Exports to Belarus also saw a peak in March 2021 (2,168 thousand USD) and experienced some fluctuations throughout theyear. Like the world market, there was a general upward trend in exports until October 2021, followed by a decline in the last two months.
Ukraine: Exports to Ukraine were relatively low and remained stable over the months, with the highest value in June 2021 (644 thousandUSD). Ukraine's imports of fasteners from Russia did not show significant growth during the period of review.

Germany: Germany was a consistent importer of fasteners from Russia, with exports showing only minor fluctuations over the year. The
highest export value to Germany was in October 2021 (674 thousand USD).

Key Observations: The first half of 2021 generally saw higher exports compared to the second half, indicating a possible seasonalpattern or other external factors influencing demand. Kazakhstan and Belarus were significant markets for Russian fasteners, with
their demand peaking in March 2021. Germany, although a consistent importer, did not experience significant growth in demandduring the period.

Russia’s Fastener Import Data Before the War

Note: Numbers in thousand USD

ImportSource

Feb.
2021

Mar.
2021

Apr.
2021

May
2021

Jun.
2021

Jul.
2021

Aug.
2021

Sep.
2021

Oct.
2021

Nov.
2021

Dec.
2021

Jan.
2022

World

82,15884,561

90,944

99,422 101,024

92,683

88,885 100,420

98,778 111,550 123,872 114,265

China

36,93934,10139,37548,19547,25042,45538,976

46,38548,43553,67567,022

71,076

Germany

8,047

8,835

9,323

9,020

9,821

8,711

8,855

9,124

8,276

8,718

8,586

6,994

Taiwan

5,693

3,856

7,327

6,014

5,735

4,740

5,111

5,499

5,736

7,117

5,225

5,447

The World Market: Imports from the world market by Russia had shown a consistent upward trend before the war was started. Theimports increased steadily from February 2021 to November 2021, and there was a significant surge in imports from November 2021 toJanuary 2022, reaching the highest value of 123,872 thousand USD in January 2022. This suggests Russia’s growing demand for global
fasteners, especially in the latter part of 2021 and early 2022.

China: China stands out as the largest import source of fasteners for Russia, accounting for a substantial share of Russia's imports. Despitesome fluctuations, imports from China have generally increased over time, with the highest value in January 2022 (71,076 thousand USD).
The consistent growth in imports from China indicates a strong demand for Chinese fasteners in the Russian market.

Germany: Germany is another significant fastener source for Russia, though on a smaller scale compared to China. Imports fromGermany have shown relatively stable levels over the months, with a slight decline towards the end of the data period. The consistentimports from Germany suggest a steady demand for German fasteners in the Russian market.
Taiwan: Imports from Taiwan experienced fluctuations over the months, with the highest value in November 2021 (7,117 thousand USD).
While the imports from Taiwan were not as substantial as those from China or Germany, the fluctuations indicate changes in demand ormarket conditions.

Key Observations: Global import sources, including China, Germany, and Taiwan, collectively show an increasing trend inimports by Russia, indicating a growing global market for Russian fasteners. China is the dominant market for Russian fastener
imports, accounting for a significant portion of Russia's imports. Germany and Taiwan also present steady markets for Russian
fastener import, with fluctuations possibly reflecting changes in local demand or economic conditions.

Conclusion
Russia has faced numerous challenges in this sector, affecting its global competitiveness and trade dynamics.
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Supply Chain Disruptions: Russia's fastener trade has been significantly impacted by disruptions in the global supply chain. The
outbreak of the COVID-19 pandemic and the subsequent lockdowns and restrictions led to shortages of raw materials and workforce
challenges, affecting production capabilities and causing delays in delivery timelines.
Sanctions and Trade Restrictions: International sanctions imposed on Russia due to its actions in Ukraine have restricted access tocrucial technologies, materials, and financial resources. These sanctions have limited the ability of Russian fastener manufacturers toaccess global markets and have adversely affected their competitiveness.
Dependence on Imports: Despite being a major producer of steel, Russia's fastener industry relies heavily on imports for essential
raw materials and advanced technologies. Sanctions and geopolitical tensions have further complicated import processes, leading touncertainties and higher costs for manufacturers.

Quality and Standards Compliance: Ensuring adherence to international quality and safety standards is essential for gaining
trust in the global market. Russia's fastener industry has faced challenges in meeting stringent international standards, impacting
its reputation and market access.
Fastener World no.202/2023 惠達雜誌