Spain’s chems sales, output to slow down in 2019 on crude prices, trade war and Brexit

LONDON (ICIS)–Spain’s chemicals are expected to suffer a slowdown in 2019 on the back of the threats related to higher crude oil prices, the US-China trade war and the UK’s departure from the EU, the country’s chemicals trade group FEIQUE said on Tuesday.

Sales are expected to rise 4.6% in 2018, year on year, totalling €66bn, up from €63bn in 2017.

However, sales growth will slow down in 2019, up by 2.6% to €67.7bn, according to FEIQUE’s estimates.

The slowdown – already noted in the second half of this year – will come after Spain’s chemicals enjoyed a stellar 2017 on the back of strong domestic demand and higher selling prices. Sales rose 7% during 2017, year on year.

This year, Spain’s chemicals volumes are expected to rise 2.6% in 2018, but growth will slow down in 2019 to 1.7%.

“Crude oil prices is one of the main factors contributing to a global economic slowdown … It is likely prices will remain around the $80/bbl mark until the end of 2018, but OPEC countries could establish more restrictions in output for 2019, pushing prices up to $85-90/bbl and putting more downward pressure on the global economy,” said FEIQUE.

The trade group warned again that a disorderly UK departure from the EU – or hard Brexit – could cost Spain’s chemicals around €300m via higher tariffs.

The trade group also appointed Carles Navarro, managing director for BASF in Spain, as its new president.

Spain chemicals sales
Evolution 2017-2017, forecast 2018-2019
(thousand million)

The country’s chemicals exports are expected to account for more than half of total sales this year and next.

Spain chemicals exports 
Evolution 2007-2016, forecast 2018-2019
(Thousand million)

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Pictured: Crude oil prices could rise in 2019, denting economic performance, according to FEIQUE
Picture source: Stefan Klein/imageBROKER/REX/Shutterstock