Cefic Chemicals Trends Report EU Chemicals Sector Expands for Fourth Consecutive Month

Editor: Dr. Jörg Kempf

European chemicals output increased in January for the fourth consecutive month, according to the latest Cefic Chemicals Trends Report. Output during January 2014 was up 3.0 % year-on-year, but EU chemicals prices were down 2.8% over the same period. Meanwhile industry sales during full-year 2013 were down 3.3 % on 2012.

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EU chemicals* production
EU chemicals* production
(Source: Cefic Chemdata International; *Chemicals (excluding pharmaceuticals, New Nace Rev2, C20))

Brussels/Belgium – The EU chemicals sector continued to show a strong trade surplus, but growth of the surplus has slowed markedly in recent years, swelling only € 1.0 billion to € 48.8 billion in 2013. Confidence levels for the sector remained broadly unchanged in March 2014 compared to February 2014. But trends in capacity utilisation and employment were negative. Capacity utilisation eased, to 78.8 % in the fourth quarter, from 79.1 % in the third quarter, whilst employment in the EU chemical industry fell 1.0 % during 2013.

Cefic Director Hubert Mandery said: “Growth is recovering only slowly: we have yet to return to the level of output achieved seven years ago, before the crisis. The data highlight the urgent need to bring about the European industrial renaissance proposed by European policymakers”.

EU Trade Surplus Expands Further in 2013

The EU chemicals net trade surplus continued to grow, reaching a record € 48.8 billion during 2013. The biggest surplus — of € 15 billion, up € 0.9 billion — was with non-EU countries in Europe, including Russia. The EU chemicals trade surplus with Asia – excluding Japan and China — reached € 7.3 billion, € 2.3 billion more than during 2012. The EU net chemicals trade surplus with China decreased slightly from € 1.5 billion in 2012 to € 1.3 billion in 2013. And the United States continued to reduce its chemicals trade deficit with the European Union, which fell by € 2.1 billion to € 6.4 billion.

Output Rises in January, but Petrochemicals Fall

Petrochemicals output continued to contract in January 2014, down by 4.2 % compared with December 2013. This steep drop was partially offset by a 7.2 % surge in output of polymers and a 6.0 % expansion in basic inorganics. Specialty chemicals grew by 4.9 % month-on-month while consumer chemicals output rose 3.3 %. Petrochemicals monthly output has continued to perform below trend growth rates since September 2011.

Prices Slide in January, with Petrochemicals Leading the Way

EU chemical producer prices in January were down 2.8% year-on-year, with petrochemicals prices down 5.1 %. But in 2013 overall, producer prices remained 11.8 % higher than the pre-crisis, full-year peak reached in 2008.

Sales Grow in the Second Half of 2013

Sales increased in December 2013 for the sixth consecutive month. Year-on-year, December sales were up 2.3 %. However, total EU chemicals sales during 2013 were 3.3 % lower than during 2012, and just 1.1 % higher than the pre-crisis, full-year peak reached in 2008.

Confidence Remains Broadly Flat in March 2014

The EU chemical industry confidence indicator (CCI) generated by Cefic remained flat in March. The CCI monthly reading reflected companies’ lower output expectations, though overall order books for the coming months and current stock levels improved slightly. This is in line with the EU manufacturing confidence indicator, showing a marginal decrease of 0.3 points in March 2014 compared to February 2014. During the fourth quarter of 2014 capacity utilisation in the EU chemical industry decreased slightly, to 78.8 %. It remains 6.6 % below the post-crisis peak recorded in the first quarter of 2011.