German chem output up 13%, capacity utilisation at 83% - group

07 July 2010 15:36  [Source: ICIS news]

TORONTO (ICIS news)--Germany’s chemical production rose 13% year on year in the first half of 2010 while capacity utilisation increased to 83%, marking a “surprisingly fast recovery” from the recession, an industry trade group said on Wednesday.

However, in the second half of 2010, chemical production was expected to grow at a slower pace, Frankfurt-based Verband der Chemischen Industrie  (VCIsaid. The group maintained its earlier forecast of 8.5% full-year 2010 production growth. In 2009, production fell 10% from 2008.

"Compared with the lowest point of the recession, we have been further gaining ground,” said VCI president Ulrich Lehner. "We are confident that matters will continue to improve in the months to come."

“For several months now, German industry as a whole has been receiving more orders. Stocks of finished goods are largely depleted,” Lehner said.

“Consequently, chemical industry customers from the automobile, electrical and paper industries and from metal processing and construction will need to order more chemical products,” he said.

However, in the second half of 2010, demand was expected to increase at a slower rate as economic stimulus programmes in most economies expired, and EU demand would be affected by the debt crisis and fiscal consolidation.

"Comprehensive restocking at our industrial customers seems hardly plausible in the foreseeable future," said Lehner. Rather, producers would adapt to "much lower growth rates" in the second half, he said.

Still, the outlook was more promising for the export business outside Europe, especially in Asia and South America, he said.

As for the first half of 2010, chemical sales rose by 16% to €77.7bn ($98.4bn), compared with the first six months of 2009. Export sale rose 18% to €45.9bn while domestic sales rose 13% to €31.8bn.

Prices rose 1.5%. With increasing demand, producers managed to pass on higher raw material costs to their customers, VCI said.

The industry employed 414,000 workers in the January-to-June period, down 1.5% from the year-earlier period.

Government-subsidised short time working programmes helped the chemical industry to largely maintain employment levels, VCI said. Currently, fewer than 5,000 chemical workers were on the programmes, it said.

With a capacity utilisation of 83% in the first half, the industry was almost back to its normal range of 84%-86%, the group said.

($1 = €0.79)

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