Europe chemical production grows 6.5% in July - Cefic

29 September 2010 16:09  [Source: ICIS news]

LONDON (ICIS)--European chemicals production in July increased by 6.5% from the same period last year as the sector continued to improve from the effects of the global economic crisis, according to Cefic’s (the European Chemical Industry Council) latest Chemical Trends Report on Wednesday.

The report also showed that production in the first seven months of 2010 grew by 13.2% compared with the same period last year.

However, despite the overall trend, Cefic warned that the month on month production index had shown a drop in production from June to July – the second decline this year following increases during the previous five consecutive months, and it was expected that recovery of chemicals activity in the EU would continue at a slower pace in the coming months of the year.

“The July data helped confirm that the overall situation in EU chemicals sector at the beginning of the second half has gradually improved since December 2008,” said Moncef Hadhri, chief economist at Cefic.

“Since June 2010, the recovery of EU chemicals activity has become less dynamic, as forecasted, and the recovery of EU chemicals activity will likely continue at a slower pace in the coming months of 2010,” he added.

On a individual country basis, the report concluded that among the largest member states, Germany’s chemicals business was leading the recovery, registering a 22.1% year on year increase in production during the January to July period.

Cefic’s report also indicated that the EU chemicals trade surplus with the rest of the world had improved during the first six months of 2010 by 19.4% year on year.

“The European Union generated an extra-EU trade surplus of €24.1bn ($32.6bn) in the period from January to June 2010 – an increase of about €3.9bn compared with the same period the year prior,” the report said.

“External demand from emerging Asia, the rest of Europe, and Latin America was the primary driver for the spike,” it added.

Cefic’s chemical trends report also revealed that EU chemicals sales in June had increased nearly 20.9% compared with June 2009, while total sales for the first half of 2010 were 18.3% higher year on year.

Price data showed that chemical products in the EU chemicals prices were 6.3% more expensive in July 2010 compared with the same period last year, as most chemical sectors experienced positive changes on prices during the period, Cefic added.

In addition, Cefic announced that according to the European Commission's latest Business and Consumer Survey (BCS) released in August, the Economic Sentiment Indicator (ESI) continued to improve in both the EU and the euro area, albeit at a slower pace, as the majority of respondents in the sector reported sizeable improvements in their order books.

($1 = €0.74)

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By: Franco Capaldo
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