S&P Global Analyzes Trade Flows of Controlled Machine Tools to Russia

Data recently published by S&P Global shows which countries are supplying Russia with computer numerically controlled machine tools and components, which the U.S. and its allies have identified as a “common high priority” good that Russia is seeking to buy to support its military in violation of Western export controls and sanctions.

S&P Global said global trade in CNC machine tools is “largely dominated” by Japan and Germany, although neither are sending many of those shipments to Russia. It said German exports of machine tools reached $107 million in 2021, but by 2023 that number was $4 million, and through May the total trade value was $1,000.

Instead, Russia is mainly buying the tools from China, S&P Global said, and also from Kazakhstan, Turkey and India. The firm noted that there was a drop in Russian imports of machine tools from the countries between February and May, which it attributed to increased export controls placed on those tools by the U.S. and its allies.

Still, the firm said a “significant majority of Chinese, Turkish and Indian exports of machine tools are” being directly shipped to Russia. Kazakhstan also is shipping the tools even though they aren’t “a significant part of the country’s economy,” the firm said, suggesting they are either transiting through the country or are being transshipped through before reaching their final destination in Russia. Kazakhstan imported $4.1 million worth of machine tools in January and exported $3.3 million, S&P Global said, adding that “99% of the value of these exports were shipped directly to Russia.”

S&P Global suggested that many of the machine tools are originating in countries like South Korea, Germany, Japan and, “to a lesser extent,” Taiwan. “While they are not engaged in direct trade with Russia for these particular goods, the process of transshipment via third countries facilities their movement,” the firm said. “Ultimately, they are often the original source of machine tools entering Russia.”