Corrected: German chems growth to continue in H1 2006-VCI

07 March 2006 14:56  [Source: ICIS news]

Correction: In the ICIS news article headlined "German chems growth to continue in H1 2005 - VCI", please read the headline as "German chems growth to continue in H1 2006 - VCI" ... instead of 2005.

LONDON (ICIS news)--The upswing in the German chemicals industry will continue at least in the first half of 2006, although the high growth rates seen in 2005 will not be repeated, chemical industry association VCI said on Tuesday.

Chemicals production in 2005 rose by 7.1%, the highest growth rate for 20 years. VCI said that in 2006 output growth of chemicals was still expected to slow to 2.5%, in line with previous forecasts. With continued rises in selling prices, however, turnover in the industry could increase by 4.5%.

But growth prospects could be diminished by high crude prices, VCI warned. The increase in costs for the industry has again intensified but could be absorbed by economic growth. Private consumption in view of high unemployment and scarce cash availability could also affect the continuation of growth, VCI said.  

During the fourth quarter last year, chemicals production in Germany rose by 6.1% from the same period a year earlier. Compared with the previous quarter, output was 1.2% higher. Production capacity stood at 84%.

Chemicals prices rose significantly in the fourth quarter, by an average of 2.3% compared with the corresponding period of 2004, VCI said. Prices were up 2% from the previous three-month period.

Turnover in the fourth quarter rose 0.8% from the previous quarter to Euro38.3bn ($46bn), mainly driven by growth in trade with other European countries.

Exports to the European Union (EU) rose 8.6% to Euro14.9bn ($17.8bn) in Q4 2005 compared with the year earlier period. Chemicals exports to the US were up 2.4% to Euro2.2bn, while they rose 7.5% into Japan to Euro701m, Asia Pacific (excluding Japan) by 12% to Euro1.5bn and Latin America by 13.2% to Euro510m.

The crude oil price sank 7.5% compared with the record value of the previous quarter to an average of $56.94/bbl. However, crude prices were still 30% higher than during Q4 2004. In January and February 2006, crude oil quotations again climbed over $60/bbl.

Naphtha cost on average Euro428/tonne in Q4, 3.6% higher than in Q3. Prices for naphtha, the key raw material for chemicals production, increased 23% from the second quarter this year.

Contract prices for ethylene rose by 28.9% from the third quarter to Euro825/tonne in Q4; propylene was up 26.6% to Euro810/tonne and orthoxylene (OX) increased by 26.2% to Euro770/tonne. However, ethylene and propylene prices fell by 4.8% and 3.1% respectively in Q1 this year compared with Q4 2005.

German chemical industry output and prices: Q4 2005 versus Q4 2004

	Production (%)	Prices (%)	Turnover (%)
Inorganic base chemicals	+ 19.7	+ 8.2	+ 7.7
Petrochemicals and derivatives	- 2.1	+ 1.9	- 6.4
Polymers	+ 1.7	+ 4.4	+ 3.8
Fine and specialty chemicals	+ 5.6	+ 3.0	+ 6.7
Pharmaceuticals	+ 13.4	- 1.6	+ 14.4
Agrochemicals	+ 20.3	+ 7.0	+ 4.6
Soap, washes and toiletries	- 1.4	unchanged	- 4.5

Source: VCI

By: Hilde Ovrebekk
+44 20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly