Communicator

Ludwigshafen BASF aerial view in 2017. Credit: Wikipedia.

14^th Dec 2024

Nearly 40% of German Companies Plan Job Cuts in 2025  
According to a survey conducted by the German Economic Institute (IW), approximately 40% of enterprises in Germany intend to reduce their workforce in 2025. Researcher Michael Grömling attributed this primarily to high energy prices.

Electricity Prices in Germany Hit a Record High  
The price of electricity in Germany reached an all-time high on Thursday, with the market cost of one megawatt-hour hitting €936. Even during the chaos of 2022, prices did not soar to such levels. "We are facing a systemic collapse," warned the German Chemical Industry Association in response to the current energy crisis.

For now, the crisis has not fully impacted consumers, as electricity contracts are locked in a year ahead. However, Germans are already paying €400 per megawatt-hour under existing agreements.

#germany  #chemicalindustry  #basf  #electricity  #electricityprices 

Picture: Indian subcontinent refineries, via ppPLUS

India’s dependence on imports to meet its requirements of basic petrochemicals, including polymers, is only expected to rise, despite projects – under implementation and on the drawing boards. This is partly because the historical baggage of poor capacity builds will take time to catch up with rising demand.

In the last few years, however, India’s public sector refiners have climbed on the petrochemicals bandwagon, seeking value-added outlets for refinery streams. They have invested in aromatics (for feeding the polyester value chain), propylene (for polypropylene, PP, and some other chemicals notably, oxo-alcohols and acrylate monomers), linear alkyl benzene (LAB), a key detergent raw material, and a few other projects. And more are to come in the near-term.

There are several commonalities amongst the firm projects. For one, the emphasis seems to be on building the C3 (propylene) value chain. This is not surprising as FCC propylene offers a simple, low-cost route to the olefin and one that can be conveniently retrofitted into existing refinery operations. There is also an overwhelming emphasis on PP production, which may not be wise, as it runs the risk of overbuild should demand growth not pan out as anticipated.

There are other propylene derivatives that can be considered, and these merit attention if not by the refiners themselves then by third party investors for whom it will be more worthwhile. Much will hinge on the commercials of the olefin supply arrangement, but such business models are widely followed, including here in India, let alone in other countries.

Importantly, the government needs to recognise that the chemical industry as a key enabler of modern living, and not a nuisance to be constrained through regulation and red-tape. The priority must be on developing well-developed clusters where not just the petrochemical industry, but also the broad chemical industry – including the fine and specialty chemical industries, wherein India’s competitiveness is well recognised – can locate and start operations in double-quick time. Clusters are efficient and safe locales where the industry can thrive, as several countries have amply shown.
 
India needs a much larger and more diversified chemical industry than it has now. The former it seems is happening. Not so sure of the latter. The herd mentality to investments needs to change. Those who have dared to do so – and there are a few examples – have been amply rewarded. More need to emulate, not imitate, them!

Ravi Raghavan, 12 Nov 2024, Linkedin post.

#india  #petrochemicals  #chemicals  #valuechains  #propylene  #fcc  #refinery  #polyester  #aromatics  #olefins  #polypropylene  #acrylics  #lab  #chemicalindustry  #indianchemicals  #IOCL  #BPCL  #HPCL  #RelianceIndustries  #investment  #specialitychemicals  #finechemicals  #oilrefining  #polymers  #ethylene  #competitiveness