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Energy Crisis Causes Global chemical industry to "lie flat"

2022-08-13 22:23:22

The energy crisis is getting worse and worse. And the crisis of power cuts is also "spreading" in Europe, especially the recent rare dry weather has caused the temperature of rivers to rise significantly. The important reservoirs and rivers in many European countries are rapidly depleted because of the hot climate, and the bad news in European countries continues: electricity shortage warning!

The big power supply countries have hit the pause button. As known, France and Norway are the big power supply countries in Europe. And Norway is the biggest exporter of electricity in Europe and now it's in a position to restrict its power exports, which makes us worry that maybe Europe is going to face massive power cuts.

Hydropower is the fourth largest source of electricity in the European Union, after gas, nuclear and wind power.Due to the impact of extreme weather, many countries now have a rapid decline in hydropower and other power generation, resulting in a surge in demand for thermal power replacement, leading to increased demand for natural gas.

Meanwhile Russia is cutting gas supplies.Affected by the conflict between Russia and Ukraine, energy in Europe is tense and prices are skyrocketing, which is bound to affect the production of chemical products and lead to the reshuffle of the global chemical industry pattern.

BASF which ranked first in the world in chemical strength a while ago, can only accept the reality that more than 20 products have been affected. There are 16 companies of the World's top 50 chemicals from Europe. Europe has seven kinds of chemical products accounted for more than 20% of the global capacity, and the effect of the consequences is gradually all over the world. For example on May 6, BASF  in officer xuan epoxy propane and so on more than 20 products affected, there is no way to guarantee to fulfill orders. Similarly, Dow Chemical, which is based in North America, has suffered from similar difficulties and cannot guarantee orders for a variety of products.

Therefore, the price increase of basic chemical products will inevitably lead to the gradual downward transmission of the cost, so that the production cost will continue to increase, leading to the economic slowdown globally.

Recently, a number of chemical feedback industry operating rate fell, including steel, textile and chemical industries, some of which even saw their operating rates drop to about 40 percent, and self-regulated production cuts are also everywhere.The logic behind the decline in operating rates is a lack of demand orders, and a significant part of the reason for this is the setback in overseas business. Under the influence of unstable shipping prices and logistics, weak consumer markets in Europe and the United States, diverting orders from Southeast Asian countries and other factors, the order volume of many domestic foreign trade enterprises has decreased significantly.

At the same time, the epidemic situation in various parts of China is still severe, and the operation of enterprises is far from returning to normal.In the industry demand low pressure situation, the market appeared a variety of strange holiday notice.High temperature holidays, power rationing holidays, summer holidays, Spring Festival holidays...Behind the bizarre furloughs is a severe reduction in orders and a miserable situation under high pressure.

In addition, many overseas chemical enterprises have also publicly expressed the market demand side of the dilemma and the impact.

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