07 June 2010 13:15 [Source: ICIS news]
LONDON (ICIS news)--The EU chemical industry is expected to grow by 9.5% year on year in 2010, excluding pharmaceuticals, as the improved output seen in the first quarter is likely to continue into the second quarter, the European Chemical Industry Council (Cefic) said on Monday.
Growth in chemicals production has continued more strongly and for longer than expected, with basic chemicals registering the fastest rebounds, Cefic said.
However, Cefic said it anticipates that a period of consolidation in the second half of 2010 and early next year will result in a much lower growth rate of 2% for 2011.
The chemical industry body also warned the European recovery remained fragile, as capacity utilisation and output were still well below normal levels.
Cefic said a pause in the rate of growth of most commodity chemicals sectors can be expected, as underlying market demand must be rebuilt and a recovery based on inventory corrections alone is not sustainable.
In addition, Cefic said there remained significant economic uncertainties, and the chemicals sector would be sensitive to any further shocks such as sovereign debt defaults.
The development of the EU chemicals industry will also depend on the effectiveness of consolidation measures taken within EU countries, Cefic said.
“The European chemicals industry continues to face relentless global competition,” said Hubert Mandery, Cefic’s director-general, adding that a successful recovery relied on access to raw materials and energy at globally competitive prices.
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