2022 International Petrochemical Top Ten News

The Russian-Ukrainian conflict triggered an energy crisis

On February 24, 2022, the conflict between Russia and Ukraine, which has lasted for eight years, suddenly escalated
.
Subsequently, Western countries began to impose severe sanctions on Russia, which led to multiple crises in the world at once
.
The escalation of the conflict began with the energy crisis
that swept the world.
Among them, the energy crisis in Europe is the most pronounced
.
Before the escalation of the Russian-Ukrainian conflict, Europe was heavily dependent on Russian exports for energy
.
In March 2022, under the influence of multiple factors such as the Russian-Ukrainian conflict and inflation, the European energy crisis broke out, and many important energy commodity price indicators such as international oil prices, European natural gas prices, and electricity prices in major European countries soared, reaching their highest peak
in the first half of the month.

The unresolved European energy crisis has posed great challenges to Europe's energy security, seriously disrupted Europe's energy transition process, and caused great trouble
to the development of the European chemical industry.

International oil and gas prices soared and plummeted

One of the direct consequences of the Russia-Ukraine conflict is that the oil and gas market in 2022 is like a "roller coaster", with ups and downs throughout the year, which has profoundly affected the chemical market
.

In terms of the natural gas market, in March and September 2022, the "disappearance" of Russian pipeline natural gas forced European countries to rush for liquefied natural gas (LNG) around the world, and major LNG importers such as Japan and South Korea also accelerated their gas hoarding, and the LNG market was in short supply for a while
.
However, with the completion of European natural gas reserves and the warm winter in Europe, global LNG prices and natural gas futures spot prices both plummeted
in December 2022.

In the oil market, market players are constantly
moving.
The OPEC+ coalition led by Saudi Arabia made the decision
to increase additional production for the first time in two years at its regular production cut meeting in June 2022.
However, in December 2022, OPEC+ chose to maintain the existing production reduction policy
.
At the same time, the United States announced the release of the Strategic Petroleum Reserve and reached agreements
with other OECD members to release crude oil reserves.
International oil prices rose sharply to their highest point since 2008 in early March 2022, stabilized after consolidating at the overall high in the second quarter of 2022, and ushered in another wave of volatile declines by mid-June 2022, falling to the level of February 2022 in late November 2022
.

Multinational petrochemical companies withdraw from the Russian market

With the escalation of the Russian-Ukrainian conflict, large Western petrochemical companies decided to withdraw from the Russian market
at the sales and production level, despite suffering huge losses.

In the oil sector, the industry suffered losses totalling $40.
17 billion, with BP losing the most
.
Other companies, such as Shell, withdrew from Russia with losses of around
$3.
9 billion.

At the same time, multinational companies in the chemical industry have also made a big exit from the Russian market
.
These include BASF, Dow, DuPont, Solvay, Clariant and others
.

The globalization crisis is intensifying

As the escalation of the Russia-Ukraine conflict has caused soaring natural gas prices and supply shortages, the price of synthetic ammonia and nitrogen fertilizers based on natural gas has also been implicated
.
In addition, because Russia and Belarus are important global potash exporters, global potash prices have remained high after sanctions
.
Soon after the escalation of the Russian-Ukrainian conflict, the globalization crisis also came
.

After the escalation of the Russia-Ukraine conflict, global fertilizer prices generally remained high from late March to April 2022, and then eased with the expansion of fertilizer producing countries such as the United States and Canada
.
However, until now, the global fertilizer crisis has not been resolved, and many fertilizer production plants in Europe are still closed
.
The global fertilizer crisis has severely disrupted normal agricultural production in Europe, South Asia, Africa and South America, forcing countries to pay higher costs to raise fertilizers and indirectly fueling global inflation
.

Plastic pollution prevention and control welcomes a historical moment

On March 2, 2022, local time, at the resumed session of the Fifth United Nations Environment Assembly held in Nairobi, representatives from 175 countries approved a historic resolution, the Resolution on Ending Plastic Pollution (Draft
).
This is the first time that the international community has agreed to
curb the growing plastic problem.
Although the resolution does not propose a specific plastic pollution prevention plan, it is still a milestone event
in the international community's response to the problem of plastic pollution.

Subsequently, on November 28, 2022, representatives of more than 190 countries and regions held the first intergovernmental negotiations on plastic pollution control in Punta del Este, and international plastic pollution prevention and control was put on the agenda
.

Oil companies achieved record high profits

Due to the skyrocketing international oil prices, global oil companies once again made amazing profits
in the first three quarters of 2022, which has been released data.

ExxonMobil, for example, posted record profits in the third quarter of 2022, with net income of $19.
66 billion, more than
double the revenue of the same period in 2021.
Chevron reported a profit of $11.
23 billion in the third quarter of 2022, close to the record profit level
of the previous quarter.
Saudi Aramco is also the world's largest company by market capitalization in 2022
.

The big oil giants are attracting the attention of the world
.
Especially in the context of the global energy transition hindered by the energy crisis, the profiteering of the fossil energy industry has caused fierce social debate
.
Many countries are considering imposing windfall profits taxes on the windfall profits
of oil companies.

Multinational enterprises have increased their weight in the Chinese market

On September 6, 2022, BASF held a full-scale
construction and commissioning ceremony at BASF's Verbund site in Zhanjiang, Guangdong Province.
BASF Guangdong Verbund site has been attracting attention, and after the official commissioning of the first plant, BASF will increase the production of modified engineering plastics by 60,000 tons/year, which can meet the growing needs of customers, especially in the automotive and electronics industries
.
Another plant for the production of thermoplastic polyurethanes will be operational
in 2023.
Further downstream installations will be expanded in subsequent phases
of the project.

In 2022, under the background of the global energy crisis and inflation, multinational enterprises will continue to
move in China.
In addition to BASF, multinational petrochemical companies such as ExxonMobil, INVISTA and Saudi Aramco are increasing their investment in China
.
At a time when the world is facing turbulence and change, multinational companies have expressed their willingness to become long-term investors in China and will develop steadily in the Chinese market towards long-term goals
.

The European chemical industry is now reducing the tide of shutdowns

In October 2022, when European oil and gas prices were the highest and supply was at its worst, the European chemical industry experienced unprecedented operational difficulties
.
Soaring energy prices have raised production costs for European companies, there is not enough energy in the production process, and some products lack key raw materials, which has led to a general decision by European chemical giants to reduce or even stop production
.
Among them, there are many international chemical giants
such as Dow, Covestro, BASF and LANXESS.

For example, BASF decided to suspend the production of ammonia to reduce natural gas consumption
at its Ludwigshafen plant.
TotalEnergies, Covestro and other companies decided to shut down some production lines
.

Governments adjust their energy strategies

In 2022, the world will face tight supply chain challenges, with component factory capacity disruptions, shipping trade delays, and high energy costs
.
This has led to the installation of wind power and photovoltaic in many countries being less than expected
.
At the same time, constrained by the energy crisis, many countries began to seek more reliable emergency energy supplies
.
In this context, the global energy transition is hampered
.
In Europe, constrained by the energy crisis and the cost of new energy, many countries have begun to use coal as an energy source
.

But at the same time, the global energy transition is still advancing
.
According to the International Energy Agency's report, as more and more countries begin to accelerate the energy transition, the global clean energy industry has entered a period of rapid development, and renewable energy generation is expected to increase by 20%
in 2022.
Global CO2 emissions growth is expected to decline to 1% in 2022 from 4%
in 2021.

The world's first carbon tariff system is launched

On 18 December 2022, the European Parliament and EU member states agreed to overhaul the EU carbon market, including the introduction of carbon tariffs
.
According to the reform plan, the EU will officially impose carbon tariffs from 2026 and conduct trial operation from October 2023 to the end of December 2025, when the carbon emission cost
of foreign importers will be mandatory.
In the chemical industry, fertilizers will be the first sub-sector
to impose carbon tariffs.