China's carbon black exports see exponential increase due to Ukraine war

HANOVER, Germany—Russia's war on Ukraine has led to an exponential increase in carbon black exports from China to Europe, according to Paul Ita, principle at Notch Consulting Group.

European imports of Chinese carbon black increased from less than 400 metric tons in January to more than 11,000 metric tons in March, according to Ita, citing data from Global Trade Atlas.

The sharp increase is linked to European Union sanctions on Russia, which supplies more than 32 percent of Europe's carbon black demand, as well as continued logistics challenges faced by the industry.

"Europe's carbon black supply chain is under unprecedented pressure due to the war; logistics were challenging before the war, now they are in chaos," said Ita in a presentation at the recent Tire Technology Expo in Hanover.

The situation, said the Notch analyst, is changing on a daily basis with suppliers and customers improvising solutions "on the fly."

In addition, banking complications and delays in shipping have led companies to turn to new sources of imports to fill the gap.

"Carbon black imports into Europe have increased from all possible sources, mainly China but also Egypt, South Africa, India, Saudi Arabia and Iran," Ita noted.

While China has been the biggest exporter to the region, challenges such as COVID-19 shutdowns, increased shipping costs and container shortages threaten the supply of the materials into the region.

"So, everything depends on how long the conflict continues, while hopes for an early diplomatic resolution are fading," Ita added.

This means that current supply chain solutions are "temporary and stop-gap," said Ita, adding that long-term disruptions would require "major new investments in supply chain logistics and infrastructure."

This, he added, could also mean that Chinese suppliers might seek to establish a permanent presence in Europe.