Issue 21, 2022 - Global Chemical Bulletin Quick Facts

Global Chemical Highlights Quick Overview

Margins in European polypropylene and polyethylene production plummeted

Recently, Emiliano Basualto, senior analyst of Axunx's polyolefin business, said that the profit margin of polyethylene (PE) and polypropylene (PP) production in Europe has fallen by 23% and 36%
respectively so far this year compared with the average in 2021.
Basualto said that due to the economic slowdown, rising production costs will face a decline
in demand.
Since June, the average cost of PE production for all varieties in the European region has risen
sharply.
PP production costs have grown at a slower pace, up 13% since June, but this is still a significant increase for the cost structure of the product – a 13% increase means an additional cost
of about €120 per tonne for producers.
European demand for PE is expected to decline by 0.
6% this year, but demand for PP is still expected to grow by 2.
2%.

European polyethylene demand this year is expected to be 18.
1 million tons, and PP demand is expected to be 13 million tons
.

The competitiveness of the European chemical industry needs to be improved

Recently, the European Chemical Industry Council (Cefic) called on the European Commission and member states to immediately develop and implement measures coordinated by EU countries in close cooperation to limit the impact of energy prices on the competitiveness of the European chemical industry, increase energy supply and encourage the reduction of energy consumption
.
Cefic said the current energy crisis has reached unsustainable levels for the European chemical industry, as the EU imports chemicals exceed exports in quantity and value for the first time, resulting in a trade deficit of 5.
6 billion euros ($5.
5 billion)
in the first half of 2022.
In addition, Cefic said the energy crisis is undermining the competitiveness of Europe's chemical industry, which is one of the most energy-intensive in Europe and has to compete
in the global market with companies in regions with more favorable energy prices.

The global economy desperately needs clean hydrogen

According to the latest report of the International Hydrogen Commission, the global hydrogen authority, the global economic energy authority, the global economy is now in urgent need of investment and development
of hydrogen.
"Today, there is more urgency than ever to invest in mature hydrogen projects
," the report states.
The return of global carbon emissions to pre-pandemic levels and growing concerns about Europe's energy security triggered by regional conflicts point to one thing: our economy needs clean hydrogen, and action is needed to translate recommendations into practical deployment
.
The report also notes that while investment in hydrogen projects is growing at a clear rate, deployment has lagged behind and more funding is needed to reach net-zero emissions by
2050.
In 2022, about 680 large-scale hydrogen projects were proposed worldwide, with a total investment of $240 billion, an increase of 50% from the number in November 2021, but only projects with an investment amount of $22 billion entered the investment decision-making stage
.

South Korea's base oil imports and exports fell in September

Recently, data released by the General Administration of Customs of Korea showed that South Korea's base oil exports in September were 414309 tons, a year-on-year decrease of 6%, but an increase of 26% month-on-month, which is also the first time since December 2021 that monthly exports exceeded 400,000 tons
.
The value of South Korea's base oil exports was $574.
6 million in September, up from $521.
1 million in the same period last year and up 37%
from $420.
4 million in August.
South Korea's base oil imports in September were 31,643 tonnes, down 28%
year-on-year.
South Korea's base oil imports fell 10% year-on-year to US$43.
9 million in September.