European chemicals industry faces fragile recovery: Cefic

According to the latest Chemicals Trends Report of Cefic, the European Chemical Industry Council, the recovery of EU chemicals remains fragile despite output growth of 2.8% in November 2013. The November uptick follows a trend that began in the second quarter of 2013 when the sector broke out of a 6-month recession. Output was down 0.2% for the first eleven months of 2013 compared to the previous year, 6.6% lower than the pre-crisis, full-year peak level reached in 2007.
 
The EU chemicals net trade surplus reached Euro 41.7 billion in October 2013 – up Euro 755 million on the same period the year prior. EU chemical prices were 2.9% lower in November 2013 than in November 2012. Year-on-year sales were 3.4% lower for the first 10 months of 2013. Sector confidence decreased slightly in January 2014 from the month prior. Capacity utilisation dropped slightly, from 79.1% in the third quarter of 2013 to 78.8% in the fourth.
 
Petrochemicals output contracted by 7.2% in November 2013 compared with November 2012. The steep drop was partially offset by strong growth in polymers, up 8.2% in November year on year. Specialty chemicals output expanded by 3.3% while consumer chemicals grew by 4% per cent. Basic inorganics expanded by 4% during the same period.
 
The EU chemical industry confidence indicator (CCI), generated by Cefic, was lower in January 2014 compared with December 2013. Companies’ production expectations for the months ahead contributed to the lower reading. Overall order books for the coming months also registered a downturn in January 2014 compared to December 2013. The confidence reading for the sector in January was above the long-term average, measured from 2005 to 2012, for the fifth consecutive month. Capacity utilisation in the EU chemical industry decreased slightly, from 79.1% in the third quarter of 2013 to 78.8% in the fourth. But it remains 6.6% below the post-crisis peak level recorded in second quarter 2011.