The full scope of the medium and long-term implications of Russia’s invasion of Ukraine on the cardboard packaging industry is not yet clear, but we do expect it to be imminent. The war has already directly impacted the sector, boosting raw material costs and changing how enterprises function.
Various operations in Ukraine have come to a halt, and firms are ceasing manufacturing and sales in Russia. In contrast, others say they will continue to monitor the situation before declaring their future measures. Meanwhile, as has aluminium, crude oil, natural gas, and naphtha have all achieved new highs.
How Russia’s Invasion of Ukraine impacts the Cardboard Packaging Industry
As more firms break relations with Russia due to the devastating and escalating Ukraine situation, this will have an impact on the availability of cardboard in the UK market. We are all aware of supply constraints, but there is a glimmer of optimism that supplies formerly directed to Russia may be rerouted to the European market. Let’s hope that’s the case. As a maker of bespoke printed cardboard packaging, we try to provide an exceptional service to our clients, which is hindered by unstable board supply chains.
Furthermore, large shipping corporations are avoiding Ukrainian ports, and many of them are also avoiding Russia. These include One Network, MSC, Hapag-Lloyd, and Maersk, which account for almost half of worldwide container shipping capacity, further suffocating regional supply networks. Without question, the conflict is having an impact on the country’s manufacturing sector. Japan Tobacco Inc, Coca Cola, Nestle, Carlsberg, Ferrexpo Plc, AB InBev, and ArcelorMittal are among the firms that have ceased operations in Ukraine. The list is growing by the day.
The invasion’s influence on global markets will be minimal in paper and cardboard production, even for Europe. Ukraine has 1.2 million tonnes of capacity, including around 750,000 tonnes of containerboard, representing less than 2% of European paper and board capacity. The majority of Ukrainian power serves the domestic market. However, there is a little outflow.
EU could suffer a short-term shortage with restricted Russian imports
Russia sells almost the same amount to the EU each year, according to the EU (mostly kraftliner, newsprint and uncoated woodfree). If we presume that trade restrictions would result in Russian paper and cardboard removal, the EU may face short-term paper shortages in several industries, notably kraftliner. Every year, Russia delivers 180,000-200,000 tonnes of kraftliner to Europe.
We really hope that a peaceful solution to the situation may be found quickly, putting a stop to the invasion of Ukraine. The longer the conflict lasts, the more severe the ramifications for Russia, Ukraine, Europe, and the rest of the globe will be. Our thoughts and sympathies are with all Ukrainians impacted by the conflict.