September 23, 2024 15:25

The European chemical industry confirms the modest recovery trend that began in the third quarter of 2023 in the first part of this year, after reaching the lowest point of the curve. However, it remains far from pre-COVID levels.

According to the European Chemical Industry Council (Cefic), production grew by 2.4% in the first quarter of 2024 compared to the same period in 2023, and further increased by 1.2% in the second quarter, which is 4.3% higher than the levels of the second quarter last year. However, the association points out that, due to the lack of demand growth, production volumes are not fully recovering.

In addition to low demand for chemical products, caused by the weakness of downstream sectors, the industry is also suffering from high energy costs, making the EU less competitive in international markets.

Thus, despite some improvement at the beginning of the year, the capacity utilization rate, at 75.2% in the first quarter, remains well below the long-term average of 81%.
The European chemical industry needs to operate profitably, Cefic emphasizes, noting that, according to an ifo survey, some chemical companies in Europe are planning "significant staff cuts in the coming months".

A strong recovery in chemical production in 2024 is unlikely, according to Cefic, as most downstream users in the chemical industry—automotive, rubber and plastic, construction, and computer manufacturing—still show downward trends. In particular, there are strong concerns about the potential low levels of production and demand in the second half of 2024 and 2025 for cars and electric vehicles.

At the national level, data analysis shows an uneven situation: chemical production grew in the first six months of this year in Germany (+4.9%) and Belgium (+4.3%) compared to 2023. Growth was also seen in Spain (+6.6%), the Netherlands (+3.8%), and to a lesser extent in France (+1.2%), while it remained stable in Italy.

The import-export activity of the European chemical industry, on the other hand, decreased by 2.9% in the first half of 2024 compared to 2023.
Chemical exports reached €113.8 billion in the first half of the year, down from €117.2 billion in the first half of 2023 (-2.9%).On the import side, the value fell from €101.1 billion to €89 billion, marking the largest decline among the EU27's manufacturing sectors.
Overall, considering the first six months of 2024, the trade surplus increased by €8.7 billion compared to the first half of 2023 (+54%), but this result was mainly due to a more significant drop in imports (-11.9%) rather than an increase in exports.

Globally, chemical production increased by 6.1% in the first six months of 2024, with China alone accounting for 43% of global sales. Despite weak international demand, chemical production in China grew by over 10% in the first half of 2024 compared to the same period in 2023.

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