Main Menu
Petrochemical Trends, Chemical Supply and Demand, Global Chemical Market, Chinese Chemical Market, China Dual Control, Energy Prices
October 19, 2021 | Tecnon OrbiChem
Energy is the latest and unexpected factor impacting petrochemical, chemical, and polymer industries in all regions of the world in Q4 2021. Skyrocketing natural gas prices are changing the cost structure for all producers, with price increases, price surcharges and hardship clauses implemented depending on the product and region. Not only prices, but also energy consumption, and, in the case of China, the need to control emissions (‘dual control’ policy) are expected to play a major role in the supply/demand equilibrium of many chemicals, affecting trade flows and negotiations for 2022.
Over the last month, many Chinese provinces have adopted mandatory “ordered power supply” measures primarily impacting steel, cement, aluminium, and chemical fibres manufacturers. Although the power curbs have primarily impacted large industrial users, some provinces have experienced power shortages so severe that residential consumers have had power curbs.
On 11 September, the National Development and Reform Commission distributed the Plan for Improving the Double Control Policy of Energy Consumption Intensity and Total Energy Consumption - Development and Reform of Environmental Resources (2021) No. 1310, which is aimed to ensure a peak in carbon emissions by 2030 and achieve carbon neutrality by 2060. The associated energy intensity curbs have exacerbated coal shortages and high fuel prices. The price of coal delivered to power stations is about $10/mmBtu before VAT – which is where liquid natural gas (LNG) prices were a few months ago – but are now about $35/mmBtu. One reference, the JKM benchmark (LNG in East Asia) for November, hit an all-time high of $56.326/mmBtu on 6 October.
Receive the latest news & insights & news from Tecnon OrbiChem in your email
North America - Charlotte
+1.704.540.1440United Kingdom - London
+44.20.7924.3955Asia - China
+86.21.6320.0701North America - Charlotte
+1.203.8545390United Kingdom - London
+44.20.7924.3955Asia - China
+86.21.6320.0701