The Russian government today warned that it was working on a retaliatory response to US energy sanctions on Russia. So that begs the question as to what Russian can actually do to hurt the US economy. The only answer I can see is in the metals markets. Russian Palladium exports into the United States account for about 40% of the Palladium used in the United States. Since Palladium is used in the production of vehicles and virtually anything that has an IC chip in it , Russia can force the price of cars and IC chips to skyrocket by shutting off Palladium exports. In such an eventuality non-Russian Palladium producing companies like SBSW and IMPUY could moon. Interestingly enough, despite Palladium being at all time highs, some mining company stocks have actually gone down on apparent profit taking over the past few days.
Another possible avenue Putin could take is to shut off nickel exports to the global economy. The prices of nickel skyrocketed yesterday on such fears, resulting in a short squeeze that was so bad that the London Metal Exchange ceased all trading of nickel until March 11th! Even Putin shutting off Russian metal exports for a brief period of time would cause literally earthquakes in the metals markets.For disclosure, I am long SBSW.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.
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