European Chemical Industry Upward Trend Goes On: Europe's Chemical Industry Back On Track?

Editor: Dominik Stephan

Europe's chemical industry continues its upward trend for the eighth month in a row: Output surged 2.8 per cent year-on-year in the first four months of 2014, latest data from Europe's chemical industry association Cefic shows.

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EU chemicals sector expands for eighth consecutive month
EU chemicals sector expands for eighth consecutive month
(Picture: Cefic)

First quarter capacity utilisation registered its highest level in three years. Overall confidence remains above its long-term average. EU chemicals prices fell 2.6 % during the first four months of the year. Because prices fell, the total value of EU chemical sales during the first three months of 2014 was unchanged compared to the same period of last year.

Cefic Director General Hubert Mandery said: “The sector continues to grow, but we are not out of the woods yet. Energy prices continue to put a strain on commodity chemicals, which are more energy-intensive. Our overall health and ability to compete depend on policy that ensures secure and competitively priced energy and feedstock.”

Year-on-Year Output up 2.8 % Through April

Despite overall expansion, petrochemicals output continued to contract in April, down by 0.8 per cent compared with April 2013. This drop was partially offset by a 5.1 per cent surge in output of specialty chemicals and a 2.0 per cent increase in basic inorganics.

Polymers grew by 1.9 per cent year-on-year, while consumer chemicals output eased 0.2 per cent. Petrochemicals monthly output has remained below trend growth rates since September 2011, and is far below its post-crisis peak during first quarter 2011.

Prices Fall in April, with Petrochemicals Leading the Way

EU chemicals prices continued to decline in April, down by 1.9 per cent compared with April 2013. This decline was partly due to a steep fall in petrochemicals prices, which fell 4.1 per cent. Year-to-date measures show EU chemical producer prices in the first four months of 2014 slipped 2.6 per cent year-on-year, with petrochemicals prices dropping 4.7 per cent.

Sales Flat During January-March 2014 and 2.3 % Higher than the Pre-Crisis Level

Year-on-year, March sales were up 0.3 per cent compared to March the year prior. Total EU chemicals sales during the first three months of 2014 were 0.1 per cent higher than the same period of last year, and just 2.3 per cent higher than the pre-crisis, full-year peak reached in 2008.

Confidence Improved Slightly in May 2014, Remains Well Above its Long-Term Average

The EU chemical industry confidence indicator (CCI) showed a marginal increase in May. The CCI monthly reading reflected continued improvement in companies’ overall order books. Output expectations and current stock levels for the month experienced no significant changes. Meanwhile, there appears no sign of improvement in EU export order books or employment expectations. Producer prices showed a slight decline in May 2014 compared to April of the same year. First quarter 2014 capacity utilisation in the EU chemicals sector reached 81.2 per cent, from 78.9 per cent in fourth quarter 2013. It remains 3.8 percentage points below the post-crisis peak recorded in the first quarter of 2011, and only a half percentage point below the long-term average from 1995 to 2012.