France’s October chemicals output up 7.3%, nears pre-pandemic level

Author: Stefan Baumgarten

2020/12/10

LONDON (ICIS)--France’s October production of chemicals and chemical products rose 7.3% month on month, following a 6.1% increase in September, according to the latest data by French statistics agency Insee on Thursday.

Chemical output was nearly back to its pre-coronavirus pandemic level – down just 0.2% from February, the last month before the first wave of the pandemic struck Europe.

Chemicals output growth was well ahead of total average manufacturing output growth, which rose 0.5% and 2.3% in October and September, respectively.

Compared with pre-pandemic levels, manufacturing output is still down 5.0% from February, with transportation equipment down 14.0%, the Insee data showed.

France’s overall industrial production grew 1.6% in October, from September, driven by energy and utilities – but is still 3.6% below February.

ANALYSTS
Analysts at Oxford Economics said that the 1.6% month on month growth in total industrial production in October had been better than expected, although manufacturing growth was “markedly weaker.”

The manufacturing weakness stemmed from a sharp fall in transport equipment production, mainly aerospace and ships, which is volatile by nature, the analysts said.

Meanwhile, French automobile production stagnated after five months of very strong growth.

“In fact, demand for cars has been buoyed recently by scrapping premiums and purchase incentives,” said the analysts.

Output for other manufactured goods - chemicals and machinery and equipment in particular -  remained robust, the analysts said.

Together with recent figures from Germany, the French data indicate that the eurozone entered the new lockdown period to contain the virus’ second wave in a relatively strong position - which, over the quarter, should help offset the downturn expected in November, the analysts said.

Looking forward, policy support will continue to be crucial in maintaining the industrial momentum in 2021, they added.

“While the German export-oriented industry is set to benefit from strong external demand, notably from Asia, the French one, which is much more domestically oriented, will rather depend on evolution of local demand,” they added.

CHEMICAL INDUSTRY EMISSIONS
In related news, French chemical industry trade group France Chimie reported on Thursday that the industry has lowered its greenhouse gas (GHG) emissions by 8% over the five years since the signing in 2015 of the Paris Agreement on global warming.

Since 1990, the industry’s GHG emissions fell 63% - despite a 26% rise in the industry’s value-added output, said the trade group.

France Chimie estimates that the sector could further reduce its emissions by around 30% in 2030, from 2015 levels.

To go beyond 30%, “it will be essential to successfully industrialise breakthrough technologies, in particular the capture and storage or use of CO2 [carbon dioxide], low-carbon hydrogen and the electrification of processes,” the group said.

Front page picture: The Feyzin oil refinery, near Lyon in central France; archive image
Source: Laurent Cipriani/AP/Shutterstock

Focus article by Stefan Baumgarten 

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