Citi: If the conflict between Russia and Ukraine is resolved, the production cost of base metals may fall
February 21, 2025
Citi analysts said in a note that a resolution of the Russia-Ukraine conflict could lead to lower energy prices and thus lower production costs for base metals. The United States and Russia have agreed to appoint negotiating teams to reach a solution. If the conflict ends and gas flows through Ukraine resume, energy prices, especially in Europe, could fall. That should lower the cost of producing energy-intensive metals, especially aluminum. However, restarts of aluminium smelters are likely to be gradual as weak demand could limit the recovery.
