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CIA says majority of UK chemical companies expect improved stability, sales in third quarter

August 10/2020

MOSCOW (MRC) -- A survey of UK chemical companies has revealed that 80% expect improved stability and a rise in domestic and international export sales over the next three months, with over 70% also seeing the same upward trend for exports to the EU, despite significant uncertainty remaining, said Chemweek.

The survey of its member companies by the Chemical Industries Association (CIA; London, UK) shows the majority also expect to see an improvement in capital expenditure, although around 10% of companies expect job losses and a reduction in R&D expenditure. The decline in industry sales came to a halt in the second quarter of 2020, with half of the companies surveyed now reporting stability or improvement, the CIA says. Exports to the EU and the rest of the world remained at current levels or improved during the quarter for half of those surveyed, as did capex and business utilization, it says. Stability and growth in employee numbers during the quarter, as well as spending on R&D, was reported by 80% of companies contacted, it adds.

"Given the huge challenges earlier in the year, it is good to see some stability has been reached. Our member data also confirms what weve seen in the official figures from the ONS [Office for National Statistics] for the first 5 months of the year, says CIA chief executive Steve Elliott. We cannot say yet that we are on an economic path to growththe next quarter looks OK, but that is building on a very challenging second quarter and we can all see that sustained economic recovery is unlikely to be smooth or predictable."

For the next 12 months some optimism remains but it is very hard to be clear, Elliott says. While the majority of businesses are predicting a stronger export performance, stability, and a ramping up of new orders, production levels, and capacity utilization, the uncertain outcome of the Brexit talks and any COVID-19 spike means the tremendous hard work shown by businesses in the sector could be at risk, he says.

Elliott called for the UK government to deliver an autumn demand stimulus package for those manufacturing industries hit hardest by the pandemic and a successful conclusion to the trade talks between the UK and EU, including tariff-free frictionless trade and regulatory consistency; taxation reform through a reduction in corporation tax; improved incentives for R&D, and a new green energy deal with a serious review of energy costs." 

As MRC informed earlier, Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased year on year by 4.9% in the first six months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-June. Production of benzene was 106,000 tonnes in June 2020, compared to 110,000 tonnes a month earlier. Overall output of this product reached 721,000 tonnes over the stated period, up by 3.9% year on year.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, petrochemistry.
Category:General News
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