LONDON (ICIS)--There was no growth in European chemicals sector output in 2013, leaving output for the period 6.4% below pre-financial crisis full-year peak seen in 2007, industry body Cefic said on Monday.
The full-year output levels are slightly above Cefic’s forecasts despite the nonexistent growth.
The council had predicted a 0.5% year-on-year contraction in output for 2013 and output for the January-November period was down 0.2% compared to 2012.
A strong performance by the industry in December saw a 2% year-on-year rise in output for the month, and helped to buoy overall output up to flat growth. December was also the fourth consecutive month of above-zero growth, indicating that the second half of the 2013 was slightly stronger than the first. However, petrochemicals production continued its slump, falling 7.1% year on year during the month, with total 2013 output for the sector down 7.9% in 2013 compared to 2012, Cefic added. December’s drop in output for petrochemicals - following a 7.2% year-on-year fall the preceding month - was partially offset by an 8.8% increase in basic inorganics production, as well as 4% growth in polymers output.
Consumer chemicals production expanded by 0.8% during the period, and specialty chemicals output grew by 1.6%, according to Cefic.
By country, general chemicals production increased strongly in Germany, Poland, France and Denmark compared to the EU average, while production level recoveries were muted in Italy, the UK and Belgium compared to the average.
Prices also fell in December, dropping by 2.7% year on year, and down by 1% in 2013 compared to 2012. Despite the drop, prices were 11.6% higher than the pre-crisis, full-year peak reached in 2008, Cefic added.
Sales for November dropped by 2% year on year, and down 3.3% for the first eleven months of 2013. November’s EU chemicals net trade surplus continued to widen, standing at €45.8bn during the first 11 months of the year, driven by a €14.4bn positive trade balance with non-EU countries in Europe, including Russia.
The industry’s confidence fell in January 2014 due to bearish production expectations, despite overall EU economic sentiment continuing to improve.
According to Cefic, sluggish output expectations were driven by overall order books for the coming months, which registered a downturn in January compared to December 2013.
However, confidence levels were above the long-term average - measured between 2005 and 2012 - for the fifth consecutive month, the council added.
Capacity utilisation also dropped slightly to 78.8% during the fourth quarter of 2013, compared to 79.1% in the third quarter of the year. Employment trends have been stable since 2010,