EU bans Russia's carbon black imports and welcomes major adjustments in its supply chain

Over time, continental Europe is actively reducing its dependence on key Russian materials, especially in the field of carbon black and synthetic rubber. It is understood that the EU plans to impose a total ban on imports of carbon black and synthetic rubber from Russia in July 2024, prompting the continent to accelerate the adjustment of its supply chain to adapt to the new market pattern.

After Russia's attack on Ukraine in February 2022, the EU's dependence on Russian black has fallen from 50 per cent in the past to less than 40 per cent. Although this is a serious geopolitical crisis, most supply chains have successfully moved rapidly to new reliable sources. Ouron Engineering carbon, one of the main participants in the European carbon black market, has played an active role in this adjustment. Pedro Riveros, the company's senior vice president and general manager of global rubber carbon black and America, said that although 2022 was one of the most significant affected years for the European supply chain, most supply chains had successfully achieved a smooth transition to new sources.

It is understood that the concerns of original equipment manufacturers (OEM) about the Russian supply chain are driving up European demand for locally purchased carbon black producers. Germany, the EU's largest user of carbon black, as well as countries such as France and Italy, have stepped up support for local manufacturers. Tom Miller, vice president and general manager of Cabot, one of the leading producers of carbon black in the European market, pointed out that the demand for carbon black is expected to increase in 2024, especially with the recovery of automobile production and the rising demand for carbon black in the tire industry.

In order to maintain inclusiveness and autonomy, Orelon Engineering carbon has set up a number of carbon black manufacturing plants in Europe and gradually benefited from customers' dependence on European producers. In addition to its factories in Europe, Orelon also has production bases around the world, giving full play to its leading position in the global rubber carbon black market. The company says its strategy is to provide long-term and strategic solutions to meet the growing needs of its customers.

It is expected that the global demand for rubber carbon black and special carbon black will increase in 2024. Riveros said that while 2023 may be a lacklustre year, there will be growth in global demand in 2024. Cabot is also braced for a surge in demand for carbon black in Europe, which is expected to grow at a compound annual rate of about 5% over the next few years.

Under the influence of the upcoming ban on Russian carbon black, industry insiders expect the sanctions to be limited not only to continental Europe, but also to other sources of supply of carbon black, including North America. Producers of thermal cracking carbon black, such as Kancabo, are gradually recovering from the market chaos, but the ban on Russian carbon black will be a potential factor in future market changes. It is reported that Kancabo has the only carbon black production base in Canada, and the company said it would seek other sources of supply to ease potential market chaos.

Europe is constantly adjusting and upgrading its carbon black supply chain to reduce its dependence on Russia and to find reliable alternative sources around the world. With the rise of sustainability trends, some companies have begun to pay attention to sustainable carbon black options such as recyclable carbon black. Thomas Sorenson, chief executive of Enviro, said concerns about the limited supply of carbon black had fuelled a surge in interest in recycling carbon black and tire pyrolysis oil. While future sanctions could have a profound impact on the supply chain, companies are closely monitoring developments to assess the long-term risk of importing goods from this geopolitical tension.