March 6, 2026 11:43

Cefic’s Chemical Trends Report Q4 2025 confirms the difficult conditions facing the sector, especially petrochemicals, with competitiveness still well below pre-crisis levels and weighed down by high energy costs, weak demand and intense international competition.

The year ended with disappointing results: while Europe’s manufacturing sector grew by 1.6%, chemical production fell by 2.4%, with the decline widening to almost 11% for petrochemicals alone, confirming the segment as the weakest link in the value chain. Polymers fared little better, with output down 6.9% over the same period.

In value terms, sector sales in the first 11 months of last year fell by 3.2%, only partly influenced by average prices, which slipped by 0.5%.

According to analysts, the petrochemicals sector has now developed a structural competitiveness gap versus non-EU producers, especially China, which benefits from large-scale capacity and lower production costs, and the United States, where natural gas prices remained 2.5 times lower than in Europe throughout 2025.

This energy asymmetry is directly reflected in trade flows: petrochemicals posted a trade deficit of €19.2 billion in value in the first 10 months of 2025. Although the EU still maintains an overall surplus thanks to specialties and consumer chemicals, the petrochemicals segment weighed on the balance, with imports amounting to €58.5 billion, confirming it as the bloc’s largest chemical import sector.
Volume data confirms the seriousness of the situation. The European chemical industry’s trade deficit more than tripled in one year, reaching 9.1 million tonnes, of which 4.7 million tonnes were attributable to petrochemicals alone.

The main national markets are also showing signs of strain: Germany saw output fall by 3.3%, France by 2.9%, and the Netherlands posted the steepest decline among the major economies, at 4.9%. Italy, while keeping losses below the 3% mark, still reflects the climate of mistrust weighing on European industrial management, with confidence indicators that, despite slight signs of improvement at the end of 2025, remain close to historic lows.

The outlook for 2026 remains subdued, constrained by demand that shows no sign of recovery and by an international trade environment made riskier by tariff tensions and the geopolitical situation.

Without a realignment in energy costs and a recovery in investor confidence, Cefic analysts note, European petrochemicals risk remaining trapped between the anvil of unsustainable operating costs and the hammer of global competition, jeopardising the resilience of the continent’s entire industrial value chain.

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