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In the past two weeks, affected by the geopolitical situation in Europe, the global stock market and commodity market have been turbulent, and the oil and gas market has experienced violent fluctuations.
Naturally, the chemical industry cannot be immune
.
At present, the European chemical industry is paying close attention to the impact of the situation and starting to deal with the impact of high energy prices
Oil and gas markets are volatile
Oil and gas markets are volatileAffected by the geopolitical situation, international oil prices and European natural gas prices fluctuated violently
.
On March 7, the price of Brent crude oil futures once exceeded 130 US dollars per barrel, setting a new high since 2008
The outlook for the oil and gas market is uncertain
.
In addition to being closely related to the geopolitical situation, a variety of factors are affecting oil and gas prices
Petrochemical prices rise
Petrochemical prices riseThe volatility of oil and gas prices has greatly affected the downstream European chemical industry, and major chemical consulting agencies are closely monitoring the situation
.
ICIS analyst Ajay Parmar said the sharp and rapid rise in oil prices could lead to a rapid decline in profit margins for naphtha-based petrochemicals in Europe
.
In addition, as European energy prices increase inflation, the European market's demand for consumer goods will also decline, which will also hit the European chemical industry
In other chemicals, contract prices for aromatics were also driven by cost pressures, with only styrene contract prices fluctuating less in March, climbing only to May 2021 levels
.
Downstream of the industry chain, the recent contract settlement prices of ethylene oxide, acetone and acrylonitrile have also risen with upstream prices
Even considering only supply disruptions, the impact on Europe's chemical industry cannot be underestimated, Parmar said
.
Current European sanctions against Russia are affecting petrochemical production in Hungary, Slovakia, the Czech Republic, Poland and Germany
The IHS Markit Global Economic Services Center reported that rising energy prices will hurt business sentiment in Europe, especially as rising uncertainty hits business confidence and limits investment
.
Investment growth has been lagging in Europe's post-pandemic economic recovery, and has just shown signs of improvement just as the geopolitical situation took a hit, IHS Markit said
Chemical companies worry about supply impact
Chemical companies worry about supply impact At present, European chemical companies are worried about the supply of raw materials because European sanctions against Russia will inevitably lead to a reduction in Russian supply
.
However, the supply problems of naphtha and natural gas are not the same
BASF Chief Financial Officer Hans-Ulrich Engel said that 20% to 30% of BASF's naphtha supply comes from Russia.
If there is a supply interruption, naphtha will be able to quickly find alternative suppliers, but natural gas does not.
Yes
.
Engel acknowledged that finding alternatives to Russian gas was not as easy as BASF's replacement of naphtha supplies
.
"BASF does not receive any oil and gas directly from Russia .
Its Ludwigshafen site only accepts supplies from Western European suppliers
.
However, these suppliers will definitely receive gas supplies from Russia in an unknown proportion, " Engel said
.
In addition, Engel said that high natural gas prices have adversely affected BASF's performance
.
According to BASF's financial report, the company increased costs by 800 million euros in the fourth quarter of last year due to high gas prices
.
Regarding the market conditions in 2022, BASF expects the global economy to grow at a moderate 3.
8% in 2022, following a strong recovery in 2021
.
BASF expects global industrial production to increase by 3.
8% and chemical production by 3.
5% due to the high backlog of industrial orders
.
However, this forecast is based on an average oil price of $75 per barrel for Brent
.
