Dow responds aggressively to rising European costs

Recently, Dow's chief financial officer Howard Unglade said that in the face of a sharp rise in naphtha prices, Dow's crackers in Europe are relying on their flexibility to switch to propane feedstock. Meanwhile, the company is taking steps to counter rising prices for natural gas as an energy source.

Dow said that its ethylene production units in Europe have greater flexibility to switch to propane as a raw material. Over the years, when propane and LPG offered cost advantages over naphtha, the main feedstock for European crackers, Dow and LyondellBasell took advantage of the feedstock flexibility of their crackers and switched to using these relatively low-cost feedstocks. low raw materials. Dow has long cracked liquefied petroleum gas at its plant in Terneuzen, the Netherlands. In the early 2010s, the company expanded LPG cracking to a plant in Tarragona, Spain. Crackers using lighter feedstocks such as LPG produce a higher proportion of ethylene at the expense of heavier products such as propylene, butadiene and aromatics.

As for natural gas, as a long-term solution, Dow is building an LNG import terminal at its Hanseatic Energy Center. The import terminal, located on the Elbe River about 40 minutes from Hamburg, is scheduled to be completed by 2026 and will meet 15% of Germany's natural gas needs, Dow Chief Executive Jim Fitling said.

In response to the impact of the current sharp rise in European energy and raw material costs on Dow, Fitlin said that European energy prices have risen for a long time. So far, Dow's crackers in Europe have been operating well, and the company is still making a profit. Dow will continue to invest in the region, and the company is ramping up alkoxylate capacity in Europe and the U.S. to meet growing demand for surfactants. "The European chemical industry faces challenges, but we must continue to focus on its development. Dow will continue to make Europe more energy-competitive to support the long-term growth of the chemical industry," Fitling said.