German chem production up 2.5% in Q2, ‘worst is over’ - VCI

02 September 2009 15:10  [Source: ICIS news]

TORONTO (ICIS news)--Germany’s chemical production rose 2.5% in the second quarter from the first after nine months of declines, the country's top chemical industry association said on Wednesday.

Sales rose 1.3% to €34.3bn ($49bn), with increased exports offsetting lower domestic sales.

"Obviously, the worst is over in the chemical industry,” Ulrich Lehner, president of Frankfurt-based Verband der Chemischen Industrie (VCI), said.

However, compared with the 2008 second quarter, production was down 15.9% and sales fell 18.8%.

The sequential increase in the second quarter was led largely by orders from abroad where sales picked up by 5.1%. Domestic sales, however, were down 2.7% from the first quarter.

Manufacturers of basic chemicals and of specialty chemicals saw sequential increases from the first quarter while producers of consumer-related products and pharmaceuticals saw declines.

Average industry capacity utilisation rose from 72% to 74.4% in the second quarter, still some 10 percentage points below the level deemed normal in the chemical industry, VCI said.

Prices fell by 0.9% on average from the first quarter, VCI said, but added it believed the steep industry price decline to be over now. From May to June there was already a slight increase in prices for chemical products, it noted.

Compared with the 2008 second quarter, prices were down 2.3%.

Employment in the Germany chemical industry was 436,800, down 1.1% from the 2008 second quarter.

Employment has declined slightly since the start of the year, VCI said, but did not disclose a sequential comparison from the first to the second quarter.

For the second half of the year, VCI expects a further improvement in overall production and sales, but added that the situation remained difficult.

The association maintained its earlier forecast of a 10% decline in chemical production and a 12% decline in the sales for the full year.

($1 = €0.70)

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