Germany's chemical production rises 6.5% in first half of 2011

14 July 2011 16:14  [Source: ICIS news]

LONDON (ICIS)--Germany’s chemicals industry production rose 6.5% year on year in the first six months of 2011, a trade group said on Thursday.

Chemicals sales rose 12.0% to €90.5bn ($127.5bn) and prices increased by 5.5%, Frankfurt-based Verband der Chemischen Industrie (VCI) said in a mid-year update.

The group said that production will continue to grow in the second half of 2011 but at a slower pace given that many producers are already running their plants at high capacity utilisation levels.

In the first six months producers could not meet demand for some chemicals and chemical products because of capacity constraints, VCI added.

For the full 12 months of 2011, VCI maintained its earlier forecast of 5% year on year growth in Germany’s chemical production.

Full-year 2011 chemical sales are expected to rise by 10% and prices by 5%, the group said.

“The mood in the German chemical industry is good,” said VCI president Klaus Engel. In fact, producers are as positive about their outlook as they were in the pre-recession 2006 and 2007 growth years," he said.

Engel added that despite risks, there are “no concrete indicators” that the economic and business situation could turn bad. “On the contrary, the situation seems to be stabilising,” he said.

However, Engel, who is also CEO of specialty chemicals major Evonik, listed a number of risk factors for the global economy and the chemical industry. These include the government debt crises in southern Europe and the US; unrest in North Africa and “exploding oil prices”; the earthquake and nuclear accident in Japan; inflation fears in Europe and Brazil; as well as bottlenecks in raw material supplies and rising protectionism.

($1 = €0.71)

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