Borealis CEO Thomas Gangl states that petrochemical producers are dealing with increased difficulties in running their production units due to varying economic and rising prices of energy. In the second quarter, financial results on July 31, the margins for olefin and polyolefin have been negatively impacted by high inflation rates in Europe, increased energy prices, and a global economic slowdown.
Gangl emphasized the need for policymakers to provide additional support to the petrochemical industry. According to him, the high energy prices will persist for the foreseeable future. He also expressed his concern about the recent blockage of Ineos' permits for its One Cracker Antwerp Project, which would only add to the existing uncertainty in Europe's petrochemical industry. Gangl also mentioned that such decisions create further challenges and uncertainty in investing in the region.
As per the statement of Gangl, petrochemical manufacturers are not considering Europe as a profitable business market for them. Moreover, firms that have established their business in other regions may find it simpler to expand in those areas. On July 20, Ineos' appeal in the Belgium court for building its Project One cracker in the country got cancelled.
According to the Financial report released by Borealis, it is anticipated that the polyolefin market will remain difficult for the rest of 2023 due to a decrease in sales volume during the first half of the year. The reports also mentioned a 5 percent drop in polyethene and polypropylene sales when compared to the previous year in Europe.
Borealis experienced a decline in margins for its polymer business in Europe. The polyethene indicator margin dropped by 24 percent to Euro 334 per metric tonne, while the polypropylene indicator margin saw a greater decline of 36 percent to Euro 383 per metric tonne compared to the previous year. According to Gangl, the demand for polymer in Europe is expected to remain the same during the first half of the year.
According to Procurement Resource, Borealis is foreseeing a more challenging market, which is creating difficulties in managing its production unit in Europe. These challenges occurred due to the varying economy and rising inflation rate in energy sectors.
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