Crisis Is On! The Production Capacity of MDI, TDI, PVC and Other Chemicals Has Been Frustrated!

As the world's second largest chemical production base, Europe accounts for about 18% of global chemical sales. 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. Therefore, the natural gas crisis will cause a double blow to the chemical industry. One is that the production process will lack sufficient energy, and the other is that the products Manufacturing will lack critical raw materials.

The natural gas supply crisis may affect the supply of related chemicals in Europe, mainly involving TDI, MDI, caprolactam, pure benzene, styrene, propylene oxide, ethylene oxide, PC and other products.

Propylene oxide

Europe's propylene oxide production capacity accounts for 25% of the world's total. Under the energy crisis, there will be important changes in the supply and demand of energy-intensive propylene oxide, and the price is expected to rise. At present, domestic manufacturers want to increase the supply of products in Europe, and the domestic market cannot supply them normally.

Vitamins and Methionine

Europe accounts for 45% of global production capacity for vitamin A, 33% for vitamin E, 40% for vitamin B2 and 30% for methionine. The cost of European enterprises is under pressure, the domestic methionine market has risen slightly, the global VE factories are operating very low, and the supply of enterprises is tight. It is expected that the VA market is expected to gradually bottom out and rebound in the second half of the year.

TDI

The global annual production capacity of toluene diisocyanate TDI is about 3.467 million tons, and the production capacity in Europe accounts for about 24.52%. Among them, the production capacity of 900,000 tons of TDI has been suspended due to force majeure, and the possibility of recovery in winter is extremely small. my country's TDI production capacity accounts for 40%, and there are already domestic manufacturers who want to increase product supply in Europe.

MDI

In 2021, the global annual production capacity of diphenylmethane diisocyanate MDI will be about 9.89 million tons, and the production capacity in Europe will account for about 28.92%. At this stage, the cost of electricity and natural gas in European factories is 5 to 8 times that of Chinese factories, and the export volume has continued to rise in recent years. If production is stopped again, the supply may be reduced.

soda ash

The production capacity accounts for 21% of the world, and the domestic soda ash operating rate is 73%. The downstream demand for domestic soda ash is low, and the overall operating rate is declining. Currently, there is a small amount of replenishment demand.

fertilizer

The global production capacity of phosphate fertilizer and nitrogen fertilizer in Europe accounts for 16% and 22% respectively. Since last year, the global fertilizer price has entered a rising channel. The current European energy crisis has pushed up the volume and price, making the industry in a boom cycle. In recent months, several nitrogen fertilizer plants around the world have announced temporary closures, mainly due to rising natural gas costs.

Vinyl and EVA

In 2021, the total global ethylene production capacity will reach 210 million tons per year, and the consumption will be about 197 million tons; of which the ethylene production capacity in Europe will account for more than 11%. In the context of the Russian-Ukrainian conflict, European ethane crackers cut production and ethylene supply was limited. Affected by the reduction of ethylene production and the limited supply of vinyl acetate, downstream EVA production in Western Europe may be under pressure. It is expected that my country's photovoltaic-grade EVA supply and demand structure will maintain a tight balance in 2022-2023.

pesticide

Europe is an important pesticide production base in the world, of which the production capacity of glyphosate in Europe accounts for 35%. There are two agrochemical giants, BASF and Bayer, and natural gas is an important cost element of pesticides. Therefore, rising natural gas will indirectly lead to rising pesticide costs in Europe. .

oxalic acid

Western Europe's adipic acid production capacity accounts for 17.8% of the world's total, and the shortage of natural gas will have an impact on its important raw material, hydrogen. The supply-side impact of adipic acid brought about by the shortage of natural gas in the future will be transmitted to the PA66 industry along the industrial chain.

PVC

PVC production capacity in Europe accounts for about 15%. Under the background of ethylene production reduction, PVC may usher in a bottom-up opportunity.

Titanium dioxide

The European production capacity is 18.2%. At present, the production capacity of titanium dioxide in Europe has dropped to 20% of the total load. The shortage of natural gas and the lack of fuel affect the production of titanium dioxide.

In addition, in the chemical industry such as VB2, caprolactam, PC, n-butanol, ethylene oxide, etc., the production capacity in Europe also accounts for a large proportion of the global production capacity, generally around 16-40%. The shortage of natural gas will also cause the production and supply of acetic acid and chemicals such as vinyl acetate, silica, and urea.