EU chems output continues to fall in June, down 1.9% year on year
Tom Brown
03-Sep-2014
LONDON
(ICIS)–Chemicals production in the EU fell for the second
consecutive month in June, decreasing 1.9% year on year,
while industry pricing was down 0.5% over the same period,
Belgium-headquartered industry body Cefic said on
Wednesday.
Lower production levels and stagnant sales are undercutting
the recovery of the European chemicals industry, Cefic said.
Output slumps in May and June, after eight consecutive months of growth, hints the sector’s progress may be slowing on the back of the general malaise gripping the eurozone.
All sub-sectors of chemicals production suffered output declines during June other than consumer chemicals, Cefic said. Petrochemicals output continued to slide in the month, falling 7.7%, while production in polymers and basic organics declined 2.4% and 3.8%, respectively.
Production of specialities remained relatively stable year on year in June, falling 0.1%, while consumer chemicals showed growth, rising 0.5% over the same period.
Output for the first six months of the year increased by 0.6% compared to the same period in 2013, Cefic said. Petrochemicals output was the worst-hit for the first half of the year, falling by 6.6%. However, this decline was offset by 3.7% output growth of specialty chemicals and a 1.3% uptick in consumer chemicals. Polymers, meanwhile, grew by 1.0% year on year, while basic inorganics edged up 0.4%, Cefic added.
Chemicals producer pricing in the first
half of the year fell 2.0% year on year, the trends report
showed. Again, petrochemicals were also the worst-hit,
with a 1.6% year-on-year drop in prices in June
compounding the sub-sector’s overall slump to 3.5% for the
six-month period.
Plastics prices fell 1.5% year on year in the first half of
2014, while consumer chemicals prices slipped 0.1% over the
same period.
Cefic’s chemicals trend report
also showed that second-quarter industry capacity utilisation
was 80.6%, down from 81.2% in the first quarter of the
year.
The stagnation of industry and wider economic growth
underscores the need for European Commission policy-makers to
move more decisively on trade agreements such as the
Transatlantic Trade and Investment Partnership (TTIP)
accord between EU and the US, according
to Cefic director general Hubert Manderay
“Exports are a key driver of industry growth, which the
EU could bolster by delivering trade agreements that reduce
trade barriers such as the proposed TTIP. Trade agreements
must improve industry access to affordable energy and
feedstock,” Manderay said.
Germany, one of the key engines both for the
eurozone economy and the European chemicals sector, suffered
a 0.2% contraction in second-quarter GDP growth, as did
Italy, while France’s second-quarter GDP stagnated.
Cefic added that the EU chemicals sector’s net trade surplus
in the first five months of the year was €18.6bn, down €1.4bn
from the same period in 2013, buoyed by a €5bn positive trade
balance with non-EU countries in Europe including
Russia.
EU industry confidence also waned a little in June on the
back of softer order books, according to Cefic’s industry
confidence survey, but remained above the long-term
average.
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