Market Trend Downward Trend for Europe's Chemical Industry: Debt Crisis Takes its Toll
The optimism couldn't last forever: Finally, it seems as if the sovereign debt crisis in the European Union will take its toll on the chemical industry. With customer industries curbing production, sales figures of chemicals are dropping also in EU core markets such as Germany. Now industry associations expect a year–on–year drop of roughly three percent for 2012...
Were the optimistic outlooks of early 2012 unjustified? After a good start in the year 2012, Europe's chemical industry had to cope with a blow in the second quarter. Nearly all industry sectors had to deal with significant production declines as compared with the first three months.
Despite this development, sales figures are still doing well: Production declines were in part bolstered by strong prices increases, the German chemical industry association VCI states in a recent market report.
Crisis Affects Stable EU Core Markets – German Productivity Drops
But now the crisis has reached the seemingly stable core markets of the European Union: Also Germany's chemical sector (the country's third largest industry) is slowing down: The VCI believes that the main reason for this development is that its major customer groups – that means other industries at home and in other European countries – were hesitant to order chemicals and preferred to use up existing stocks instead.
“We Will Have to Postpone Hopes for a Stable Upswing”
„For the time being, we will have to postpone our hopes for a stable upswing in chemical business. Now the EU debt crisis is making itself felt in our domestic activities too. Many of our customers are cutting down production and ordering fewer chemicals. A bright spot: on the export side, the dynamic markets in South America and China made up for the falling demand from Southern Europe,” VCI President Dr. Klaus Engel commented.
While 2012 started optimistically – a mood that remained stable almost until ACHEMA 2012 – the VCI's forecasts have significantly changed their tune: Price increases and falling sales and production rates are expected for 2012, the association states... more on page 2!