26 February 2013 12:47 [Source: ICIS news]
LUDWIGSHAFEN, Germany (ICIS)--Global chemicals production, excluding pharmaceuticals products, is likely to grow by 3.6% in 2013 compared to 2.6% in 2012, driven by a stronger performance from emerging market economies, BASF's CEO Kurt Bock said on Tuesday.
The figure would mark a rebound to close to the levels seen during 2011 when worldwide chemical production growth stood at 3.8%.
Despite the continuing impact of austerity measures in Europe and North America, the company predicts a gradual decline in investor uncertainty during the year, “although the [Italian] election last night did not really contribute to this”, Bock noted.
The slump in production increases during 2012 was driven by weak Asian emerging market growth in the first half of the year, and the failure of an anticipated upswing in global demand in the second half of the year to materialise, BASF said.
The steps taken by governments in developing countries to increase the rate of growth this year are likely to have a positive effect on the global market, Bock added.
“Worldwide economic growth will be bolstered... by low interest rates and government stimulus measures in emerging markets. We expect a gradual decline in economic uncertainty and an increase in investor and consumer confidence,” he said.
According to Bock, BASF experienced strong demand in January, beyond the levels normally associated with new year inventory replenishment, but it was too early to predict whether this would continue,
“January was quite a good month, but it was also characterised by a restocking effect for our customers. If you eliminate this restocking effect, the month was still quite strong, but one swallow does not make a summer,” he said.
However, the cost of oil is above what the company expects as an average for this point in the year, Bock said, adding that BASF does not see any softening in the cost of raw materials in the near future.
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