LONDON (ICIS)--EU chemicals sector output rose year on year in the first three months of 2018 but lost momentum as the general European economy cools, according to trade group Cefic on Wednesday.
Sector production rose 1.9% year on year during the quarter but fell 1.4% compared to the closing three months of 2017, a banner season for the chemicals industry, as the surge in momentum in the eurozone at the end of the year gradually slowed.
Basic inorganics output weighed on overall growth, contracting 6% year on year while specialty chemicals productivity rose 1.7%.
Cosmetics, paints and coatings, and fibres output rose more than 2.5% over the same period, Cefic said in its monthly Chemicals Trends Report.
Capacity utilisation fell to 82.9% during the quarter compared to 84.1% in the fourth quarter of 2017, and down compared to the same time a year earlier.
Pricing proved more resilient, increasing 2.5% year on year on average.
Plastics, dyes and pigments prices rose more than 4% year on year over the same period.
Sector output is no stronger looking ahead to economic indicators for the second quarter, Cefic added, noting that the second-quarter ifo World Economic Sentiment survey posted a drop in economic optimism from 26 points in the first quarter to 16.5 points in the second.
Eurozone manufacturing sector growth slowed to its weakest level in 15 months in May, according to purchasing managers’ index (PMI) data, with signs of further cooling expected.
“The world economy is still experiencing an upturn, but it is losing impetus,” said Cefic chief economist Moncef Hadhri. “The economic climate deteriorated in nearly all regions.”
EU chemicals imports rose 8.3% in January-February year on year, as a surge in product from South Korea and China offset drops in trade with the US, Africa and the Middle East.
Exports rose 5.8% over the same two-month period, driven by petrochemicals demand and a significant uptick in sales to the US.
Demand for EU product from the Middle East, South Korea and China dropped during the period, Cefic added.
Pictured: A scientist holding chemicals
Source: Mito Images/REX/Shutterstock