Environment & Energy

...Energy crisis aftereffects! Most overseas chemical revenue fell!

It all starts with the energy crisis in Europe after the Russia-Ukraine crisis.

Since 2022, the slowdown in the global economy, geopolitical tensions caused the chemical industry to face a number of problems such as shrinking demand, supply chain shocks and declining market expectations, resulting in a decline in the industry since the high point in 2021. According to the current 2023 annual financial report released by domestic and overseas giants, in the face of high oil prices and falling chemical prices, the performance of global chemical giants is generally under pressure, and the industry as a whole is seeking a breakthrough in weak demand.

According to the performance of the 15 important chemical giants in the world, the performance of the global chemical giants in 2023 generally declined (13/15, accounting for 86.67%). In terms of profits, in addition to Mitsubishi Chemical rose 511%, Wanhua Chemical barely increased, the rest without exception plummeted (13/15, accounting for 86.67%), of which Lotte Chemical plunged 975%, Evonik Industries AG plunged 126%, DuPont fell 92.8%, Formosa Plastic Group fell 80%. From the partial results of the first quarter of 2024, the situation has not improved.

An important reason for the sharp fall in profits: excessive cost increases. Since the conflict between Russia and Ukraine, Russia's gas supply to Europe has continued to decrease, and the gas supply of "Nord Stream 1" once dropped to 0. This has forced Europe to use high levels of natural gas as an alternative fuel. European gas prices ($4.8 / mmBTU) and electricity prices (€0.05 / KWH) are still higher than pre-pandemic levels...