More Than a Breadbasket, Ukraine is Key Iron Ore and Metals Supplier

The prospect of a Russian war in Ukraine has rattled global markets. Russia is a top producer of commodities from grains to diamonds.

The concern about Ukraine has mostly revolved around the country’s large agriculture sector.

In 2021, the nation of 41.1 million was the world’s fourth biggest cereals exporter, behind only the U.S., Argentina, and India, according to Trade Data Monitor, the world’s premier source of trade statistics.

Those exports were split almost 50-50 between corn ($5.9B, up 21%) and wheat and meslin ($5.1B, up 41%). With food prices already increasing 30% in 2021, and inflation biting sound the globe, there’s good reason to worry.

But Ukraine’s export profile is more complicated than its status as the former breadbasket of the Soviet Union.

It’s also a key supplier of metals and iron ore, especially to China, meaning that conflict could force up iron ore and steel prices. In 2021, Ukraine was China’s fifth biggest supplier of iron ore. Overall, it was the world's fifth biggest exporter of iron ore by value, behind only Australia, Brazil, South Africa, and Canada.

A broad network of iron ore mines belong to what is still one of the top metal and mining production networks in the word. It includes roughly 50 iron ore deposits, and has the fifth total reserves in the world.

Overall, Ukraine’s top exports in 2021 were iron and steel ($13.9B, up 81%), followed by cereals ($12.3B, up 31%), animal and vegetable fats ($7.1B, up 23%), and iron ore ($6.9B, up 63%), according to TDM.

The top markets for Ukrainian iron and steel were Italy, Turkey, Poland, the U.S., and Russia. For iron ore, it was China, the Czech Republic, Poland, Austria, and Slovaia.

Overall, Ukraine’s exports increased 38.3% to $68.1B in 2020, recovering from the Covid slump along with the rest of the world. Its top markets were China ($8B, up 12%), Poland ($5.2B, up 60%), Turkey ($4.1B, up 70%), Italy ($3.5B, up 80%), and Russia ($3.4B, up 26%).

Ukraine’s top exports to China were iron ore ($2.9B, up 16%), cereals ($2.5B, up 37%), animal or vegetable fats ($960.5M, down 14%), and oilcake and residues from vegetable fats and oils ($601.7M, up 25%).

Exports are a big reason why Ukraine’s gross domestic product is expected to grow 3.6% in 2022, according to the International Monetary Fund.

That prosperity is driving more consumption. After dropping in 2020, Ukrainian imports increased 34% to $71.9 billion in 2021.

Ukraine’s top source of imports in 2021 was China ($10.9B), followed by Germany ($15.3B), Russia ($6.1B), Poland ($4.9B), and Belarus ($4.8B).

Imports from China increased 32.4% from $8.3B in 2021. The top imports were electronics ($2.8B, up 26%), machinery ($2.1B, up 39%), cars and trucks ($528.5M, up 56%), and plastics ($446.2M, up 62%).

Imports from Russia increased 34% from $4.6B in 2020. The top category was easily mineral fuels, up 33% to $3.4B in 2021. That was followed by machinery ($418.8M, up 22%), plastics ($351M, up 61%), and iron and steel ($300.8M, up 65%).

What’s remarkable about Ukraine’s agriculture sector is how diversified its export markets are, especially compared to its heavy industrial products. There’s not a single top customer gobbling up over 50% of production. Instead, there were 21 countries to which Ukraine shipped over $100M worth of cereals in 2021.

Ukraine’s top markets for cereals were China ($2.5B), Egypt ($1.4B), Turkey ($918.2M), Indonesia ($744.8M), and Spain ($644.9M). It shipped almost nothing to Russia, according to official records.

Vietnam Takes Key Place in Asian Supply Chain

As Vietnam moves up the rankings of most prosperous countries, we’re getting more of a sense of exactly where the nation of 97 million will fit in the global economy.

Already, it’s clear that Vietnam is becoming a key manufacturing base for consumer products destined for Europe and the U.S., and an important part of pan-Asian supply chains, according to an analysis by Trade Data Monitor, the world’s premier source of trade statistics, which has been building up its Vietnam database.

The top markets for Vietnam are the U.S., China, and European Union. In 2021, exports to the U.S increased 24.9% to $96.3 billion. Exports to China rose 14.5% to $56 billion, and shipments to the EU rose 12.7% to $40.6 billions. Within the EU, Vietnam’s top trading partners were Germany and the Netherlands.

The U.S. market is being driven by U.S. residents buying consumer goods. Shipments of textiles and garments to the U.S. increased 15% to $16.1 billion in 2021, while exports of computers and computer parts rose 22.9% to $12.8 billion. Exports of machines, equipment, tools and instruments rose 45.9% to $17.8 billion. Shipments of footwear rose 17.8% to $7.4 billion.

In China, however, trade data show that Vietnam is as much a supplier of parts as a pure manufacturing source. And some of those supply chains are changing. The dominant category was telephones. Exports increased 23% to $15.2 billion, but exports of computers and computer parts were basically flat, rising 0.1% to $11.1 billion. And exports of textiles fell 1.8% to $1.3 billion. Exports of rubber rose 24.9% to $2.3 billion. Obviously, Western companies are hoping that Vietnam becomes a consumer society able to purchase Western goods, but so far its biggest supplier is still China, partly because the countries are joining up to form parts of the same supply chains.

Imports from China rose 30.5% to $109.9 billion. By comparison, imports from the EU rose 15.5% to $17.3 billion, and imports from the U.S. rose 11.4% to $15.3 billion. Imports of computers and computer parts from the U.S. rose 1.6% to $4.8 billion. Cotton imports fell 11.4% to $1.2 billion. Imports of machines, equipment and tools from China rose 46.4% to $24.9 billion. Shipments of computers and computer parts rose 18.5% to $21.9 billion. And imports of fabrics increased 24.7% to $9.1 billion. Imports of iron and steel increased to 79.9% to $4.4 billion.

Overall, Vietnam’s gross domestic product is expected to rise 5.5% in 2022, up from 2.6% in 2021, according to the World Bank. The exporting manufacturing sector in 2022 will benefit “from steady demand from the United States, the European Union, and China,” the World Bank wrote.

To be sure, the Covid-19 pandemic has hit Vietnam in the last couple years, after the country was largely successful at curtailing the virus in 2020. Vietnam is a rare country whose total trade is twice that of GDP, without the stimulus of oil or mining resources, and now its trade with regional partners is expected to expand further thanks to the new Regional Comprehensive Economic Partnership. The RCEP, which will cut tariffs and ease trade among countries that already trade with each other, includes Vietnam, China, Japan, South Korea, Australia and New Zealand.

“Encouraging free trade is even more important now that the global economy is in a slump and there are signs of countries turning inward,” Japanese Prime Minister Yoshihide Suga told other leaders, according to a Japanese official quoted in the Wall Street Journal.

Vietnam has been the prime beneficiary of China’s changing trade relationships with the U.S. and Europe, rising protectionism in the West, supply chain adjustments, and the boom in economies across Asia. The combination of low labor costs, stable exchange rates and prodigious foreign investment from multinational companies have turned Vietnam into a shining star.

It’s the versatility of the Vietnamese export machine that makes the country’s future especially bright. Vietnam’s factories make everything from Nike and Adidas shoes to Samsung and Apple phones, as well as wide varieties of furniture and electronics. It’s also been boosting its shipments of heavy industrial goods like iron and steel, according to TDM data.

Vietnam Aims to Benefit From Asia Trade Deal in 2022

One of the big winners in the global economy in 2022 is expected to be Vietnam. The county of 97 million is benefiting from manufacturers moving more factories to its export zones, as well as from an ambitious new regional trade agreement.

As Vietnam recovers from Covid, its exports are expected to surge, according to an analysis of 2021 trade data by Trade Data Monitor, the world’s premier source of trade statistics.

Vietnam’s gross domestic product is expected to rise 5.5% in 2022, up from 2.6% in 2021, according to the World Bank. The exporting manufacturing sector in 2022 will benefit “from steady demand from the United States, the European Union, and China,” the World Bank wrote.

In the first 10 months of 2021, Vietnamese exports lept 17.4% to $269.7 billion from $229.8 billion over the same period in 2020, according to TDM. The top markets were in the U.S., Europe, and China. Exports to the European Union rose 10.6% to $32.2 billion, while shipments to the U.S. rose 23.1% to $76.7 billion according to TDM. By comparison, exports to China increased 17.3% to $44.5 billion.

The bulk of Vietnamese exports were electronics and textiles destined for middle-class consumers. The biggest category was “telephone and parts”, worth $46.6 billion in the first 10 month of 2021, up 10.4% from the same period in 2020; followed by “computers, electrical products and parts”, up 12.1% to $40.9 billion; and textiles, up 5.5% to $26.1 billion.

But Vietnam’s supply chain capacity is growing more sophisticated. Exports of parts for the motor of ships, for example, rose 20.4% to $5.4 billion.

To be sure, the Covid-19 pandemic has hit Vietnam in the last couple years, after the country was largely successful at curtailing the virus in 2020. Vietnam is a rare country whose total trade is twice that of GDP, without the stimulus of oil or mining resources, and now its trade with regional partners is expected to expand further thanks to the new Regional Comprehensive Economic Partnership. The RCEP, which will cut tariffs and ease trade among countries that already trade with each other, includes Vietnam, China, Japan, South Korea, Australia and New Zealand.

“Encouraging free trade is even more important now that the global economy is in a slump and there are signs of countries turning inward,” Japanese Prime Minister Yoshihide Suga told other leaders, according to a Japanese official quoted in the Wall Street Journal.

Vietnam has been the prime beneficiary of China’s changing trade relationships with the U.S. and Europe, rising protectionism in the West, supply chain adjustments, and the boom in economies across Asia. The combination of low labor costs, stable exchange rates and prodigious foreign investment from multinational companies have turned Vietnam into a shining star.

It’s the versatility of the Vietnamese export machine that makes the country’s future especially bright. Vietnam’s factories make everything from Nike and Adidas shoes to Samsung and Apple phones, as well as wide varieties of furniture and electronics. It’s also been boosting its shipments of heavy industrial goods like iron and steel, according to TDM data.

Vietnam’s top supplier of goods was China, at $89.1 billion in the first ten months of 2021. By comparison, it imported $13.9 billion from the EU, and $12.9 billion from the U.S.

One country that is surprisingly making inroads is Australia, which boosted exports to Vietnam 72% to $6.5 billion in the first 10 months of 2021. The bulk of that was essential commodities, such as iron ore, cereals, copper and cotton, according to TDM data.

China Sets Record With $6 Trillion in Total Trade in 2021

For two decades, China’s manufacturing and export sector has seemed to only be going one direction: up. The latest notch: A record trade surplus of $676.4 billion in 2021, up from $524 billion in 2020. Overall for the year, Chinese exports rose 29.9% to $3.4 trillion, the highest total value of goods ever shipped out by a single country, and imports increased 30.1% to $2.7 trillion. For the first time ever, total trade exceeded $6 trillion, according to Trade Data Monitor, the world’s premier source of trade statistics.

In December, China continued its recovery from the Covid-19 pandemic. Exports increased 20.9% to $340.5 billion, beating analysts’s expectations. And imports rose 19.5% to $246 billion, below the roughly 25% rise analysts had predicted. In familiar categories, China has restored supply chain production and shipments to pre-pandemic levels. In December, for example, exports of cars increased 78.2% to $3.1 billion, shipments of high-tech goods rose 23.4% to $105.3 billion, and exports of steel products rose 84.9% to $8.5 billion.

"China has been at the forefront of economic development and pandemic response globally, and maintained a rapid growth in foreign trade, which registered a record high in volume and a steady progress in quality," said Li Kuiwen, a government spokesman. To be sure, there are risks even for the Chinese export sector. Cities have continued to experience Covid-19 outbreaks. On Monday, China will release GDP data for the fourth quarter of 2021 that is expected to be sluggish, a bit over 3%. And, at some point, Chinese export growth will stop, upsetting what’s become the dominant economic dynamic of the century.

More than ever, it’s important to parse trade statistics to see what’s really going on. China won’t release data in February, because the Chinese New Year skewers data, so this is the last dump of numbers we’ll get before March. Increasingly, the most important piece of Chinese trade data to study is its imports. There’s a battle for positioning to win market share in what will soon be the world’s richest economy. China’s Asian neighbors such as Vietnam and Malaysia are winning. Imports from the group of ASEAN countries increased 21.8% in December to $39.6 billion, while imports from the U.S. increased 3% to $17.1 billion, and imports from the European Union fell 3% to $27.7 billion. With a new regional trade deal coming into effect in January, Asian countries are likely to continue their dominance.

China continues to import fewer components for key industrial sectors. Imports of automotive parts fell 20.6% year-on-year in December to $2.5 billion. Purchases of LCD panels declined 12.3% to $1.7 billion. And China is buying fewer finished goods, too. Imports of motor vehicles fell 32.3% to $4.2 billion, and those of aircraft declined 46.3% to $1.3 billion.

And China’s hunger for commodities is its chief strategic aim. Take, for example, its trade with Australia. There have been tensions between the two countries over responsibility for the Covid-19 pandemic, and geopolitical power in the region. But Australia has the coal, iron ore, and other essential metals that Chinese industry needs. So in 2021, Chinese imports from Australia increased 40% to $164.8 billion, while exports rose 24.2% to $66.4.

Coal imports fell a bit in December, falling 20.9% year-on-year to 31 million tons. Imports of natural gas increased 4.6% year-on-year in December to 11.7 million tons, and Chinese oil imports grew 20.1% to 46.1 million tons. The upshot, according to trade statistics, is that coal appears to have become the swing supplier for Chinese energy producers. While this is not the retreat from coal that world leaders have been hoping for to save the world from excessive carbon emissions, it does at least signal that China is weaning itself from dependence on coal.

On the export side, China continues to depend on U.S. consumption. Exports to the U.S. increased 27.5% in 2021 to $576.1 billion for the year, and imports rose 32.7% to $179.5 billion for the year, generating a trade surplus of $396.6 billion. The work-from-home economy continues to taper off. Exports of household appliances fell 2.5% to $8.1 billion, and exports of furniture fell 3.9% to $7.1 billion. At the same time, exports of footwear increased 29.3% to $5.3 billion, and luggage shipments rose to 24.3% to $2.9 billion.

TDM Insight: Top Ten Trade Trends of 2021-2022

TDM Insight: Top Ten Trade Trends of 2021

Global trade hoisted itself back on track in 2021 after a devastating 2020, and will stabilize itself in 2022, according to the World Trade Organization, and an analysis by Trade Data Monitor, the world’s premier source of trade statistics. Fears about supply chains crumbling and consumers failing to get goods shipped to them were unfounded.

The $8.6 trillion global logistics industry, it turns out, is robust enough to get goods from any producer to almost any buyer or consumer on earth. The WTO now expects global trade to increase by 10.8% in 2021, and by 4.7% in 2022. According to UNCTAD, total imports and exports of goods were $5.6 trillion in the third quarter of 2021, a new quarterly record. Total trade in goods and services is expected to reach $28 trillion for 2021, UNCTAD said.

Here are TDM’s top ten trade trends of 2021, and their likely outcomes in 2022:

1. China Close to Passing U.S. as World’s Top Importer: In 2001, the year China joined the WTO, it was already the world’s fourth biggest importer, behind the U.S., Japan, and France. Global trade leaders figured it wouldn’t take long for a country of billion-plus consumers to open itself up and become the world’s biggest importer. Instead, the U.S. has continued to be the world’s biggest buyer of goods, the reason Washington maintains leverage in trade negotiations.. However, in the first 10 months of 2021, the U.S. imported $2.3 trillion worth of goods, compared to $2.2 trillion for China. It appears highly likely that in 2022, China will at last pass the U.S. to become the world’s top importer.

2. ASEAN Countries Rival China as Manufacturing Base: Trade tensions between China and the U.S., and worries about supply chains, have pushed manufacturers to build plants in countries like Vietnam, Thailand and Singapore, all part of the 10-nation ASEAN alliance, that produce many of the same goods as factories in China. For example, Chinese shipments of mobile phones, the ultimate complicated manufactured high-tech consumer good, fell 19.7% in November to $16.5 billion from $20.6 billion. The country still shipped out 88.7 million phones, but that was a 18.8% decline from 109.2 million a year ago. The proliferation of new supply chains across Asia is why Chinese imports from ASEAN countries in November rose 34.9% to $38.5 billion from $28.5 billion, the biggest jump in imports from any major region. By comparison, imports from the U.S. rose 22.1%, to $17.8 billion from $14.6 billion, while shipments from the European Union imports increased only 6.8% to $27.3 billion from $25.6 billion.

3. Commodity Prices Boom Amid Scramble for Resources: The combination of the work-from-home economy and industrial activity picking up has generated a booming demand for power around the world, despite fears about climate change. And that’s forced up prices. For example, Chinese natural gas imports rose 17.8% to 10.7 million tons from 9.1 million tons a year ago, while, by value, they increased 169.8%. At the same China, cut crude oil imports 8% to 41.8 million tons from 45.4 million tons, although imports by value rose 73.7% to $24.6 billion from $14.2 billion. Prices for everything from soybeans to iron ore rose in 2021, part of a wave of inflation sweeping the globe that is likely continue into 2022.

4. U.S. Hikes Energy Exports: From gas fields in Texas to coal mines in Appalachia, the U.S. has always been energy rich. Now, it’s becoming a chief supplier of energy to countries around the world, trade statistics show. With new terminals for exporting gas and coal, the U.S. has emerged as the world’s dominant, and most diversified, energy supplier. The U.S. exported $189.4 billion worth of mineral fuels in the first 10 months of 2021, up 53% from $123.4 billion over the same period in 2021. Coal exports increased 49% to $7.3 billion. Energy experts the U.S. to remain dominant in energy production and exports for decades to come.

5. High-Tech Trade Booms: The prevalence of lockdowns, boosted further by the omicron crisis, has solidified people’s habits around the world. Home workers have been buying computers, routers, and other gear to transform their home spaces into offices. The recent omicron wave of the Covid-19 virus will perpetuate people's habits and buying patterns into 2022. In the first nine months of 2021, Chinese high-tech imports increased 24% to $560.4 billion; U.S. imports went up 16% to $419.2 billion; and European Union imports rose 18% to $332.8 billion.

6. Cars Go Electric: Global electric car sales are expected to top $800 billion by 2027, more than double the current value of the market. Overall, around five million electric cars are expected to be sold in 2021, driven by evolving technology, and fears about climate change. And it’s showing up in trade statistics. The top market, Germany, increased imports of electric cars 138% to $6.1 billion in the first nine months of 2021. The second biggest market was the UK, which hiked imports 121% to $5.2 billion. The world’s top exporter was Germany, which increased shipments 110% to $10.6 billion.

7. Batteries Needed: That’s boosted the trade in materials related to making batteries. Chinese exports of lithium batteries increased 78% to $25 billion from $14 billion during the first 11 months of 2021. It’s getting raw materials from Latin America. The world’s top two exporters of the raw material needed to make electric batteries -- lithium carbonate -- are Chile and Argentina, according to an analysis by Trade Data Monitor. But now the Latin American countries have been changing where they ship the material crucial to manufacturing electric vehicles. Increasingly, they’re sending lithium to China, as that country develops its own battery supply chain, instead of other key markets like Japan, South Korea and the U.S., according to TDM.

8. U.S. Consumers Lead Recovery from Covid: U.S. exports have driven global manufacturing and the recovery of the global economy. In the first ten months of 2021, U.S. exports increased 21.4%, rising to $2.3 trillion from $1.9 trillion. U.S. consumers have been buying a lot of everything. Furniture imports, for example, were up 26% to $60.9 billion, part of the transition to a stay-at-home economy. Vehicle imports increased 16% to $227.7 billion. Even if it’s passed by China in 2022, there’s no sign that the U.S. will crease to be a lucrative consumer markets for the world’s top manufacturing corporations.

9. Fears of Supply Chain Meltdown Overblown: After a summer of stories about container ships crammed together by ports and in canals, trade rebounded in the fall. For the first 10 months of 2021, the Port of Los Angeles, the top U.S. port, registered imports of $226.9 billion, up 20% from $188.4 billion during the same time period in 2020. Other U.S. ports registered similar increases. It seems unlikely that the container shipping industry will retreat in the forseeable future. It is the anchor of the hyperglobalization that now dominates the economy.

10. Coal is… Back: Despite the renewed focus on the climate, coal trade boomed in 2021. U.S. coal exports, for example, increased 49% to $7.3 billion over the first ten months. China more than tripled imports of coal by quantity, hiking purchases to 35 million tons in November, up from 11.7 million tons in the same month a year ago. By value, shipments grew a whopping 761.8%, rising to $5.9 billion from $681 million. China’s top sources of coal are Indonesia, Russia, Mongolia and the U.S. Chinese coal imports from the U.S. increased 993.4% in the first ten months of 2021, to 8 million tons, from 733,789 tons over the same time period in 2020, according to TDM data. Imports from Indonesia leapt 60.3% and those from Russia grew 82.2% while shipments from Mongolia fell 43%.