This courtesy of Jim Church:

For years, BASF, one of the world’s largest chemicals companies, built its business model around cheap and plentiful Russian natural gas, which it uses to generate power and as feedstock for products that make it into toothpaste, medicines and cars.

Today, dwindling Russian gas suppliesare proving a threat to the company’s vast manufacturing hub here—the world’s largest integrated chemical complex spanning some 200 plants. Earlier this month, Russia started throttling back its supply of gasto Germany and other European countries. In response, company executives are doing what was unthinkable just a few months ago: considering how to potentially shut down the complex if gas supplies fall further.

The threat isn’t just to BASF and its 39,000 employees in Germany. Because BASF and other chemicals companies sit at the beginning of most industrial supply chains, their disruption would reverberate well beyond the sector, threatening Europe’s economy at a time of high inflation and slowing growth. A throttling of BASF’s ammonia output, a key ingredient in fertilizers, could exacerbate the world’s growing food crisis, analysts say.

Posted by: Timothy Birdnow at 11:06 AM | Comments (1) | Add Comment
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