European chemicals production flat in first seven months of 2014

According to the European Chemical Industry Council (Cefic), European chemical production was flat in the first seven months of 2014. As per the latest Cefic Chemicals Trends Report, output in production volumes contracted again in July. Three consecutive months of output decline have undone gains during the first four months of the year. EU chemicals prices were lower, while the value of sales levels during the first seven months of the year remained unchanged. Net exports of EU chemicals reached Euro 22.5 billion for first half 2014, slipping somewhat from last year’s all time record. By end-July, European chemicals sales were only one per cent above the peak achieved six years ago, in 2008.
 
Hubert Mandery, Director General, Cefic, said, “We are facing headwinds. Sector growth is flat, and our EU net chemicals trade surplus is beginning to narrow. It is difficult to compete in a global marketplace with energy and feedstock-rich regions like the US and Middle East.  It is high time for our policymakers to put national and European energy policies in order.”  
 
Overall chemicals output increased 0.1 per cent between January and July compared to the same months of 2013. Year-on-year, July data show EU chemicals output declining for the third time after eight consecutive months of growth. Only consumer chemicals and specialty chemicals escaped the fall: output from all other subsectors was lower in July 2014 than in July 2013.
 
Petrochemicals output continued to slide, down 6.5 per cent during the first seven months of 2014 compared to the same period the previous year. This decline was partially offset by 3.3 per cent output growth for specialty chemicals and a 1.5 per cent uptick in consumer chemicals. Year-on-year, polymers grew by 0.4 per cent, while basic inorganics edged up slightly by 0.2 per cent.
 
Prices continued to show marginal declines in August 2014, falling 0.8 per cent compared with the same month last year. Petrochemical prices dropped 0.6 per cent during August, bringing the markdown during the first eight months of the year to 2.8 per cent, year-on-year. Plastics prices were up 0.3 per cent in August 2014 compared to August 2013. Prices were flat for consumer chemicals. EU chemical producer prices slipped 1.7 per cent for the first eight months of 2014 compared to the same period the year before.
 
The EU had a Euro 22.5 billion net trade surplus in chemicals during the first half of 2014. It was led by a Euro 6.1 billion positive trade balance with non-EU countries in Europe, which includes Russia. The figure was Euro 1.6 billion lower in January-June 2014 than the same period in 2013. The EU chemicals trade surplus with Asia – excluding Japan and China – grew by a scant Euro 360 million. The EU net chemicals trade surplus with China narrowed slightly to Euro 519 million. The US further shrunk its chemicals trade deficit with the European Union by Euro 130 million to Euro 3.2 billion during the six-month period.