Global petrochemical practitioners have not changed their profit confidence

The global petrochemical industry has been facing challenges head-on since the sudden escalation of the Russian-Ukrainian conflict on February 24

Raw material and energy costs have risen sharply

Affected by the geopolitical situation in Europe, intensified global supply chain problems, rising commodity prices, and increased financial stress, many analysts around the world have lowered their economic forecasts for 2022

Essence Huamai said that due to the trend of crude oil, the cost of basic raw materials such as naphtha and liquefied petroleum gas and petrochemical production will rise

The outlook for crude oil prices remains uncertain due to Russia's status as an important oil supplier and the potential impact of Western sanctions on trade, Essin Huamai said

European chemical industry worries about security of supply

At present, because of the current series of geopolitical conflicts concentrated in Europe, European companies are very worried about energy security issues

At the recent World Petrochemical Conference held in Houston, Texas, INEOS Group Director Tom Crotty said that the conflict between Russia and Ukraine and the resulting economic sanctions against Russia have affected the entire European chemical industry in terms of energy prices and energy security.

Crotty said: “The European chemical industry exports about 6% of its chemicals to Russia and imports about 7% of its raw materials from Russia

　　Crotty said the further east European chemical companies are, the more challenging the situation will be

　　Luis Serra, president and CEO of Nova Chemicals Canada, also said that high oil prices will have a greater impact on cracking operations in Europe, because Europe uses more naphtha as a feedstock than North America

　　The report of Essence Huamai also shows that 20% of the steam cracking capacity in Europe is at risk of reducing the supply of raw materials

　　Essen Huamai also said that security of supply in Europe has given rise to a competitive disadvantage for European and Asian producers relative to North American and Middle Eastern producers

　　Petrochemical earnings outlook remains positive

　　Despite continued geopolitical tensions and volatility in the market due to rising demand for chemicals that further exacerbates already strained supply chains, the chemical industry's earnings have been better-than-expected

　　According to data from Essence Huamai, China will account for about 40% of the global demand for basic chemicals in 2021, of which the production capacity of basic chemicals will account for 34%

　　However, Elamo also admitted that the current petrochemical industry challenges are huge