Market Figures Output Grows, Prices Slide: EU Chemical Industry has not Fully Recovered

Editor: Dominik Stephan

A mixed bag: While Europe's chemical industry churns out more and more products, low prices avert record figures. According to recent Cefic figures, the chemical sector in the EU showed a € 49 billion surplus, yet capacity utilisation and employment trends are negative.

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EU chemicals sector expands for fourth consecutive month, as sales EU chemicals sector expands for fourth consecutive month
EU chemicals sector expands for fourth consecutive month, as sales EU chemicals sector expands for fourth consecutive month
(Source: Cefic)

European chemicals output increased in January for the fourth consecutive month, according to the Cefic Chemicals Trends Report: Output during January 2014 was up 3.0 per cent year-on-year, but EU chemicals prices were down 2.8 per cent over the same period. Meanwhile industry sales during full-year 2013 were down 3.3 per cent on 2012. 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 per cent in the fourth quarter, from 79.1 per cent in the third quarter, whilst employment in the EU chemical industry fell 1.0 per cent during 2013.

EU Trade Surplus Expands Further in 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”.

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