News on May 30, 2023, the EU's latest round of economic sanctions against Russia has aroused widespread concern in the market. Recently, Mr. Paul Ita, president of Notch Consulting, Inc., published some thoughts on the European Union's ban on the import of Russian carbon black in the blog of the company's website.
In February 2023, the European Union, the United States and the United Kingdom announced a new round of economic sanctions against Russia, mainly targeting Russia's mining and metallurgical industries, especially the carbon black field. According to EU regulations, from June 30, 2024, the import of carbon black from Russia will be completely banned. The ban includes three important details: the executed import contract is valid before May 27, 2023, and the buffer period is from May 27, 2023 to June 20, 2024, during which a total of 75.25 tons of carbon black can be imported; if Exhausting the import quota ahead of schedule, the blanket ban will come into effect from June 20, 2024. As far as I know, in this regulation, there is no limit on how much material a certain company or a certain country can import. The European Commission has a website to track the quota, and as of April 11 this year, there were 729,000 tons of carbon black quota that had not been used. According to Eurostat data, 27 EU countries will import 427,000 tons of carbon black from Russia in 2022, with a total import value of 534 million euros. These imports account for around 25% to 30% of total EU carbon black demand.
However, although the European Union's ban on Russian carbon black had some impact on the market, it did not cause panic in the market. This is mainly due to the fact that the current European carbon black market is relatively weak and there is still a large supply of carbon black available. Especially since the outbreak of the war in Ukraine, imports of carbon black from non-Russian sources, especially China, have increased dramatically, and these stocks are still being sold. In addition, the buffer period also provides customers with sufficient time to find and conclude new cooperation agreements with other suppliers such as India and China. The situation improved further as freight rates eased and container shortages eased. However, there are still some challenges in implementing the ban.