Gas Shortage' Aggravates Cost Pressure! The Giant Cut Off the Supply Warning!

Although the plan was opposed by many countries, it also revealed a message: the shortage of natural gas supply in Europe is becoming increasingly severe. The natural gas supply in Europe mainly comes from Russia, which owns 40% of the EU's natural gas market share. The decreasing supply of Russian gas has a greater impact on many European countries, especially Germany.

We see that gas prices in Germany have doubled from the previous year due to a prolonged shortage of gas supplies due to Europe's sanctions program against Russia. The production of chemical products in Europe is very dependent on natural gas, and the natural gas crisis will inevitably lead to a rise in natural gas prices, which will put huge cost pressure on suppliers.

Europe is "out of breath", and the chemical giants can't sit still, and the supply is cut off!

▶BASF: The world's largest integrated production site will be shut down if its natural gas supply at its Ludwigshafen site in Germany falls below half of current demand.

▶LANXESS: If natural gas from Russia is completely frozen, there will be a direct negative impact on its adjusted core profit of 80 million to 120 million euros per year, and the indirect impact cannot be quantified.

▶Brentag: Rising energy prices will put the European chemical industry at a disadvantage for the foreseeable future. Without access to cheap energy, the mid- to long-term competitiveness of the European chemical industry will suffer.

The implementation of this plan will also bring challenges to the European chemical industry. There are a large number of chemical plants in Europe, including well-known chemical giants such as BASF and Bayer. The shortage of natural gas will not have enough energy during production. It is conceivable that many factories will not be able to operate, thus facing the crisis of shutdown.