The Polymerist is a continued must-read, with last week's comments on the natural gas crunch really key:
I don’t usually write about natural gas and oil on Tuesdays, but things are developing quickly over in Europe and I’m concerned. If you don’t know there is a major natural gas pipeline called Nord Stream 1 that delivers natural gas to Germany, Europe’s largest economy and chemical producing powerhouse, and it’s been undergoing maintenance since July 11th. Maintenance is normal. A good preventative maintenance program keeps things running smoothly and it usually only last 10-12 days. Natural gas started flowing again on July 21st, but only at 40% of normal levels, which had started before the planned shutdown.
...No matter how you look at this problem this is not a good thing for the European chemical industry. The chemical industry is reliant of natural gas for two primary things:
- Feedstock: steam reforming of methane to make carbon monoxide, steam cracking ethane/propane to make ethylene/propylene)
- Steam generation: applying heat and performing #1
If you ever get a chance to hang out in a large scale chemical manufacturing operation the use of steam is everywhere. Steam is how heat gets moved around (heated oil is also used, but less common) and whenever you need steam it’s often generated at the site. If you want to run a distillation you need steam. If you want to steam crack some stuff, guess what, you need steam. If you want to run your reaction at 200 C or higher you need steam. Without steam the chemical industry for the most part stops running and without the raw materials to make stuff, which the chemical industry makes, then supply chains falter even more than they are now.
There's a lot of room for DOOOOOOOOOOOOOOMMMM in my thinking for chemical manufacturing in the fall, i.e. it feels like China's supply chain/zero COVID disruptions are never-ending and the Ukraine/Russia issues are making things extremely hard for Europe, which means that it's going to be hard for American chemical manufacturing supply chains. I'd like to think that both things won't happen, but I have a much stronger sense that the European situation is going to be brutal. Here's hoping I'm not right.