News

Europe’s energy crisis is getting worse! Domestic chemicals enter an upward cycle

Latest News: Europe’s energy crisis has escalated again, and Gazprom says it has shut down the Nord Stream-1 gas pipeline indefinitely due to the discovery of a new technical problem. Europe is the second largest chemical production base in the world. The natural gas supply crisis in Europe may affect the supply of related chemicals in Europe. Once the European energy crisis becomes the norm, the difficulty of coal transportation and the lack of nuclear power generation will lead to an increasing shortage of natural gas in Europe. The product is expected to enter an upward cycle, and the leading chemical segment is expected to seize the opportunity to seize market share.

Natural gas accounts for a large proportion of Europe’s energy structure. Russia is the EU’s main energy importer. Currently, European natural gas is mainly used in industrial, household, commercial and service industries and power generation. Taking Germany as an example, in 2021, 366 billion kWh of German natural gas will be used in industry, 306 billion kWh will be used in households, 127 billion kWh will be used in business and services, and 1,250 kWh will be used in power generation. In the industrial sector, according to statistics from the IEA and Bloomberg, more than 40% of the European chemical industry’s raw materials come from natural gas, and one-third of the energy used in the production process also depends on natural gas. In the household sector, according to Xinhua News Agency, about half of the 41.5 million households in Germany use natural gas for heating, and the fourth quarter of winter will also be the peak period for natural gas demand. In the field of power generation, natural gas accounts for 19.0% of the European power generation energy structure, which is the highest proportion of fossil energy. EU countries are highly dependent on imports for energy. In 2020, 58% of the EU’s total energy consumption comes from imports. In 2021, the EU’s natural gas import dependence rate is 83%. Among them, Russia is the first importer of the EU in the three major fossil energy fields of natural gas, oil and coal. In 2020, Gazprom accounted for 42.43% of the EU’s imported natural gas, and the average proportion of Gazprom in 2008-2018 was about 40%.

Russia’s gas cut-off caused a shortage of natural gas in Europe, and the high temperature and dry weather exacerbated the European energy crisis. On March 31, 2022, Putin officially signed the presidential decree on the settlement of natural gas trade in rubles with “unfriendly countries”, and the new regulations will take effect from April 1, 2022. Since September 3, the transportation of the “Beixi No. 1” natural gas pipeline has been completely stopped. The Rhine River is the transportation artery of the coastal countries. According to CCTV news, on August 18, the water level of the Rhine River at the Kaub measuring point near Koblenz, Germany dropped to 34 cm. The low water level brought about the transportation of various raw materials. A very serious challenge. On August 2, local time, French power giant EDF issued a warning that due to an epic heat wave, the company may further cut nuclear power output. According to data from the French grid operator RTE, the power generation capacity of French nuclear reactors fell to 41% on September 3. Against the background of the increasing difficulty of coal energy transportation and insufficient nuclear power generation, the demand for natural gas in the power sector has increased, which has pushed Europe to become increasingly short of natural gas. Natural gas prices in Europe have soared amid multiple crises, and inventories are at historically low levels.

Insufficient natural gas supply in Europe has impacted the supply of chemicals, which may have a profound impact on the global supply pattern in the long run. According to a research report released by the German Chamber of Commerce and Industry (DIHK), by surveying 3,500 German industrial companies, about 16% of them believe that it is necessary to reduce production or abandon some operations, of which nearly a quarter have cut production and stopped production, and the other quarter One in the production cut, the remaining half of the companies are planning to take measures. Europe occupies an important position in the supply side of chemicals such as antioxidants, ethylene, acetic acid, MDI, TDI, and vitamins. The production reduction in Europe may push the corresponding sub-sectors into an upward cycle, and my country’s ability to stably supply the world is expected to be highlighted again.

Prev:
Next: