Since July, the EU bans Russian carbon black, and market turmoil is inevitable

Last year, the European Union implemented its tenth round of sanctions against Russia, including an import quota system for Russian synthetic rubber and carbon black. Specifically, the import quota for synthetic rubber is 562973 tons, and the quota for carbon black is 752475 tons, and these quotas will only be effective until the end of June this year. Starting from July 1, 2024, the EU will implement a comprehensive import ban on Russian synthetic rubber and carbon black.

As the July ban implementation date approaches, the supply side of the European market will face unprecedented challenges. Although some manufacturers have actively expanded their portfolio of non-Russian alternatives to cope with the upcoming changes, market uncertainty remains high.

"Continuing changes in the market environment have forced companies to re-examine and adjust their supply chain strategies." German carbon black distributor PentaCarbon analyzed that since 40% of Europe's total carbon black production comes from Russia, Ukraine and Belarus, the sanctions will have a profound impact on the carbon black market. The implementation of the ban may lead to a supply shortage in the global carbon black market, which in turn drives up carbon black prices in importing countries. In addition, PentaCarbon emphasized that purchasers need to establish closer cooperative relationships with suppliers to jointly forecast market demand to cope with possible extension of delivery cycles due to supply chain adjustments.

In addition, some foreign media predict that with the recovery of the European automobile market, the prices of carbon black and synthetic rubber may rise in the next few weeks. However, import restrictions on Russia will undoubtedly affect the inventory levels of carbon black and synthetic rubber in European countries, resulting in a reduction in supply on the market, which may have a considerable impact on related European industries.

Carbon black prices in Europe have shown a significant upward trend. Taking Germany as an example, since the beginning of the year, the price of carbon black shipped to Germany has reached a new high in 2024, and its price has soared by 70%. On the other hand, as Russia shifts its carbon black export focus to Turkey, China and Southeast Asia, Russian carbon black has gradually become the main source of my country's imports. According to the latest customs data, my country's total carbon black imports will reach 274,000 tons in 2023, a year-on-year surge of 163.23%. Among them, imports from Russia dominate, reaching 196,000 tons, accounting for 71.53% of the total imports. And some of Europe's market share is being replaced by India and the United States. Among them, Indian carbon black companies responded quickly to this change. For example, in April last year, Indian carbon black Philip Company successfully entered the European market. At the same time, Bora Carbon Black is also actively expanding its production capacity, and its two new plants are expected to be put into operation in 2025. How to seize the European market and seize opportunities will be an issue that needs attention and consideration in the future.