Carmakers Hit With Soaring Metal Prices Owing To Ban On Russian Supplies

Saving up for a new ride? Better start putting more cash aside. Russia's invasion of Ukraine is ramping up the price of metals used in cars, from aluminum in the bodywork to palladium in catalytic converters to the high-grade nickel in electric vehicle batteries, and drivers are likely to foot the bill, Nick Carey and Christina Amann reported for Reuters.

Photo Insert: Some businesses have seen a 60% rise in the cost of aluminum over the past four months, as well as soaring energy bills.

While metals have not been the target of Western sanctions yet, some shippers and auto parts suppliers are already steering clear of Russian goods, putting more pressure on carmakers already reeling from a chip shortage and higher energy prices.

“So what happens from here?" asked Carlos Tavares, chief executive of Stellantis, the world's fourth-biggest automaker, when speaking to reporters last week.

"First, what happens is that we have an escalation of cost that comes from raw materials and energy that is going to put more pressure on the business model," he said. Aluminum and palladium both hit record highs on Monday while nickel, which is also used to make stainless steel, crossed the $100,000-a-ton level for the first time ever on Tuesday.

Andreas Weller, chief executive of Aludyne, which makes aluminum and magnesium die-cast parts for automakers, said his European business has seen a 60% rise in the cost of aluminum over the past four months, as well as soaring energy bills.

With annual sales of $1.2 billion and a surge of costs in the "hundreds of millions of dollars," Weller, whose company is based in Southfield, Michigan, said he has been forced to ask customers to pay more than the prices already agreed.

"Some are more understanding and cooperative than others, but we cannot survive without that," Weller, who has four foundries and one machining plant in Europe, told Reuters.

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