EU’s chemical output static in 2014, sales decline 1.1% – Cefic

LONDON (ICIS)–The EU’s chemical output rose 0.2% in 2014 year on year while sales fell 1.1% with a “worrying” performance at the start of 2015 as long-term problems for the sector in Europe remain in place, the European Chemical Industry Council (Cefic) said on Tuesday.

The fall in sales during 2014 was in part due to the fall of exports, the Brussels-headquartered trade body said. The EU’s chemical sector net trade surplus decreased during the year to €44.1bn, a considerable fall from the trade surplus record registered in 2013 at €48.2bn.

The fall in exports was due in part to Russia, on the back of the sanctions imposed by western countries due to the conflict in Ukraine.

“The lack of growth [in  the chemical sector] in 2014 was partly due to falling exports. Though the price of oil has fallen here in Europe, lowering producer costs, long-term problems persist, especially the challenge of securing affordable energy supplies,” said Hubert Mandery, Cefic’s director general.

The poor performance of the chemical sector in 2014 was also reflected in prices, which during the year fell 1.8% compared to 2013.  

Employment, however, enjoyed an increase of almost 18,000 workers during the year 2014. In 2013, the EU chemical sector employed 1,155,000 people, while the figure in 2014 stood at 1,173,000, said Cefic.

Moreover, Cefic said the start of 2015 has not been encouraging for the chemical sector. According to the trade group, in January 2015 chemical output declined 0.3% year on year, with petrochemicals dragging down the average with a fall of 7.6% compared to January 2014.

The fall in petrochemicals output was partially offset by specialty chemicals, which increased their output by 4.2% in January 2015 year on year, while basic inorganics output contracted by 1.2%.

Polymers (down 0.6%) and consumer chemicals (down 0.2%) both lost ground in January 2015 compared to the same month of 2014.

Pricing did not enjoy a good month in January either. According to Cefic, chemical values eroded during the month by 6%.

Cefic’s own Chemical Confidence Indicator (CCI) index showed how the chemical sector in the EU has started 2015 with a pessimistic approach. Measuring order books and production expectations of chemical executives, the indicator deteriorated in the first quarter of 2015 compared to the last three months of 2014, said Cefic.