Cefic sees some signs of recovery in EU chemicals industry

Brussels – European chemicals makers neared the end of 2023 confirming a trend set throughout the year: a weakened EU economy, shrinking sales and production almost 9% below prior-year levels.

Cefic's gloomy assessment for the first 11 months reflected how "higher energy costs and a lack in demand, are heavily impacting competitiveness of the chemicals industry in Europe."

Chinese imports, it added 24 Jan, "are hitting EU producers which we fear is only the beginning as the Chinese oversupply will be exported and Europe is a key destination."

The industry body, did, however, note a hint of recovery for certain sub-sectors within its November 2023 data, with EU27 chemical production about 1% above the 2022 level.

"It is too early to confirm if this upturn will be stable," commented Cefic. "2024 is expected to bring some faster growth, but the improvement will be gradual."

A particular bright spot was synthetic rubber production, Cefic reporting a 32% year-on-year jump in output across the EU27 in November – without commenting on this uptick.

Elsewhere, Cefic said basic chemicals sectors continued to report a double-digit decline, while overall petrochemicals output for the period was 11.7% lower compared to the same period last year.

A “marked downturn” was recorded for polymers at 11.4%, while the decline in the production of basic inorganics and speciality chemicals fell 7% year-on-year.

With 3.5% growth, consumers chemicals such as soaps, detergents and cosmetics remained strong, bringing the overall decline in chemicals production to 8.7% for the 11-month period.

While production declined in Europe, Cefic said China reached its “highest level of chemical production ever” at 9.5% year-on-year growth.

“Chemical production in China seems to be improving month-by-month since June 2023,” said Cefic, adding “on the EU27 side, the chemical industry is losing competitiveness.”

This, Cefic said, is due to high energy and feedstock costs in the region, leading to production and trade activity declining “significantly” compared to 2022.

“Chinese imports are hitting EU producers which we fear is only the beginning,” said Cefic.

The organisation said that it expected the Chinese oversupply to be exported and that “Europe is a key destination.”