EU chemicals output grows for fourth quarter

Brussels – European chemicals industry has reported four quarters of sequential growth in production, continuing its trend of “steady but small” improvements since the third quarter of 2023.

Despite the “slight upturn,” production volumes were “far from” the pre-Covid levels, as demand remained weak in the region, reported the European Chemical Industry Council (Cefic) 5 Sept.

Output in the first quarter of the year was 2.4% above the previous-year levels, while the second quarter saw a 4.3% year-on-year growth, said Cefic in its monthly review.

Quarter-on-quarter, production in the second three months of the year was up 1.2%.

“The EU27 chemical industry seems to have reached its ultimate low in second quarter 2023,” said Cefic.

However, it went to say, given the lack in demand growth, the industry's production volumes are “still not completely recovering.”

Cefic remained cautious about the recent “encouraging numbers,” noting that 2023 was a weak benchmark year for comparison.

“A strong recovery of the chemical production in 2024 is unlikely when most of the chemical industry’s downstream users – automotive, rubber & plastics, construction, computer production – are still showing downward trends,” it added.

The construction and automotive markets, Cefic said, are “still struggling,” amid concerns of possibly low production and demand levels in the second half of 2024 and 2025 for cars and electric vehicles.

Despite some improvement earlier this year, at a level of 75.2%, capacity utilisation remained “well below” the long-term average of 81%

Energy, meanwhile, is still more expensive than before the Covid crisis and not competitive on a global scale, Cefic added.

“EU gas prices – currently 4.7% higher than the US – need to decrease, and overall business confidence in the chemical industry needs to improve,” the association warned.