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Arctech Enhancing Its Local Content Strategy To Ease The Pressure Brought By The Outbreak Of Conflict Between Russia and Ukraine

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The outbreak of conflict between Russia and Ukraine on 24 February 2022 has sparked some concerns regarding potential supply disruption and price volatility among several clean energy technology materials. According to the IHS report “Russia-Ukraine crisis, Implications for cleantech” Significant price increases are expected across materials during the second quarter of 2022. Despite uncertainty about long-term supply impacts, major price spikes are expected during the second quarter of 2022 across key materials that have a significant production share coming from Russia.

Prices for a range of critical materials are expected to increase between 5% and 36% between the first quarter of 2022 and the second quarter of 2022, as the global market reacts to the impacts of economic sanctions and ongoing COVID-19–related disruption.
The biggest price impacts are expected for nickel, steel, and aluminum, which each have a significant share of supply coming from Russia. While Russia and Ukraine account for a relatively small share of global steel production, at 5% (China dominates with 55% of global supply), they each rank within the top three import markets for steel in the European Union, putting a significant share of EU steel imports at supply risk. Turkey is the other top three steel import market to the European Union and obtains a significant share of scrap steel for use in electric arc furnaces from Russian imports. Contract prices are being renegotiated by up to US$300 per metric ton just to cover the cost, while spot prices explode. In the second quarter of 2022, there might even be shortages in Europe, leading to allocation decisions by steelmakers. It is unclear to what extent renewables manufacturers, which only account for a very small share of global steel sales, would be affected.

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Local content has been reckoned as one of the important factors for balancing the price of raw materials, which is increasingly important in the current context. Tackling this issue, Arctech has developed a manufacturing network across the globe with 8 manufacturing and OEM centers around the world. Further announced its vertically integrated production plan in India, the company is amping up 3GW tracker products to meet the demand from global markets by building an Indian manufacturing base. It is estimated to enter operation in the first half of 2022.

Besides the Indian manufacturing base, Arctech has a fully-operational manufacturing facility with a production capacity of 6.4 GW and an additional 2.8 GW production capacity from the Fanchang manufacturing base in trial operation. Enhancing local Content Strategy will not only ease the pressure brought by the outbreak of conflict between Russia and Ukraine but also enable the company and their customers’ cost-effective products with quick response times to feed the growing solar markets in the coming future.

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