Kaolin Producers Adapt to Demand Shifts in Cosmetics Amid Global Challenges

The ongoing Russia-Ukraine war has had far-reaching consequences on various global industries, and the kaolin market is no exception. Ukraine, which plays a crucial role in the supply of high-quality ceramic clays has seen its production capacity significantly impacted by the conflict affecting the global supply chain and market dynamics.

Ukraine, once a Breeding Ground of Kaolin Vendors Faces Difficulties

Before the war, Ukraine was a key player in the global kaolin market. In 2021, the country accounted for 3.6% of the world’s kaolin production producing 1.6 million tons, as per the U.S. Geological Survey.

Ukraine’s importance in the market extended beyond kaolin, as it also produced around 4 million tons of ball clay annually, primarily sourced from the Donetsk region. This region, now heavily affected by active hostilities was known for its high-quality clays. These are prized for their plasticity, whiteness, and low water absorption after firing, which are the key characteristics for the production of porcelain tiles.

The war’s disruption of the Donetsk region has created significant challenges for the global ceramics and tile manufacturing industries, which mainly depend on Ukrainian ball clay. The leading producer in the region, VESCO Group, a subsidiary of UMG Investments, exported approximately 84% of its 2.4 million tons of clay production in 2020 to 18 countries. Spain, one of the largest consumers of Ukrainian clay, relied on these exports for over 26% of its supply, particularly for ceramic tile manufacturing.

Supply Chain Issues Backed by the War to Create Hindrances

The country’s kaolin and ball clay production has seen a notable decline with the war affecting Ukraine’s key mining regions. European mineral groups like Sibelco, Imerys, and AKW, which had established significant operations in Ukraine’s clay sector have also been impacted. For instance,

• Sibelco’s subsidiary, Donbas Clays PJSC, produced 1.3 million tons of high-quality clays annually before the war. These disruptions have strained global supply chains, compelling manufacturers in Europe and beyond to seek alternative sources of kaolin and ball clays.

Spain, which shifted from using locally sourced red clays to predominantly imported white clays, had been sourcing 70% of its required white ball clays from Ukraine before the conflict. This dependence on Ukrainian clay has made Spanish ceramic tile manufacturers particularly vulnerable to supply disruptions, pushing them to explore other international sources to meet their production needs.

Decline in Ukraine’s Mineral Production Rankings to Impact Demand

The conflict has not only disrupted kaolin production but also affected Ukraine’s overall mining capabilities and global production rankings. In 2021, the country exported 64.1% of its kaolin production, with Italy and Spain being the top consumers. However, military operations in key mining regions have caused a decline in Ukraine’s output and its position in the global market.
Ukraine’s ranking in clay kaolin production fell from sixth place in 2021 to ninth in 2022. This drop reflects the broader impact of the war on the country’s mineral production capabilities.

Other minerals have experienced similar declines in global rankings due to the war. Alumina, for instance, dropped from eighth to sixteenth, and graphite fell from eighth to thirteenth. These decreases illustrate the significant challenges Ukraine faces in maintaining its position as a leading producer of critical minerals in the face of ongoing conflict.

Europe-based Manufacturers to Focus on Developing New Supply Chains

Europe-based ceramic and tile manufacturers have been hit hardest by the disruptions in Ukraine’s kaolin supply. The demand for high-quality kaolin and ball clay for porcelain tile production remains strong, particularly in countries like Spain and Italy. As a result, these manufacturers are now facing increased costs and the need to source materials from alternative suppliers, which may not offer the same level of quality or affordability.

Several Europe-based mineral companies including Imerys and Sibelco are working to mitigate the impact by adjusting their operations and looking for other regions to meet the demand. However, the process of establishing new supply chains can be time-consuming and costly, leading to potential delays and price increases in the ceramic products market.

Kaolin Clay Finds Extensive Applications in Cosmetics and Personal Care Items

Even though the kaolin business is showcasing a decline in terms of growth, its use in the cosmetics and personal care industry is anticipated to open new opportunities. Increasing trend for customized skincare and cosmetics products across the globe has encouraged key brands to change their formulations as per varying needs.

Kaolin clay is considered a prominent ingredient that is extensively being used in several products to gain a large consumer base. Brands are launching cleansers, face masks, and powders infused with kaolin clay to help manage dry skin, prevent aging, and reduce the chances of acne. In June 2024, for instance,

• New York-based Sofie Pavitt Face launched its latest Reset Benzoyl Peroxide Acne Treatment Mask containing kaolin clay, glycolic acid, and benzoyl peroxide. The robust, pore-cleaning mask is anticipated to help customers elevate their drying skin and clear bacteria. Launch of similar products containing kaolin clay is anticipated to bolster demand in the coming years.

Emergence of New Kaolin-producing Areas to Create Opportunities in Future

The war’s impact on the kaolin market is expected to have long-term repercussions. Even if the conflict were to end soon, rebuilding Ukraine’s mining infrastructure in key regions like Donetsk would take time.

The disruption to global supply chains has forced manufacturers to rethink their sourcing strategies, which may result in a more diversified, albeit potentially more expensive, global kaolin market. Novel application areas like cosmetics and personal care are anticipated to open the door to success.

As Ukrainian mining companies attempt to maintain some level of production despite the war, their global market share continues to decline. This shift is likely to create opportunities for other kaolin-producing regions to fill the gap left by Ukraine, although few can match the high-quality clays that the country was known for.