MOSCOW (MRC) -- Germany's chemical industry association VCI (Frankfurt) says that after setbacks in the first half of the year caused by COVID-19, Germany’s chemical-pharmaceutical industry rebounded in the third quarter with a sequential increase of 1.9% in production and 2.8% in sales, reported Chemweek.
Producer prices also edged up 0.5% compared with the previous quarter, and the number of employees in the industry remained stable at about 464,000, VCI says. However, on a year-on-year (YOY) basis the figures were below the levels of 2019.
Chemical-pharmaceutical production declined 1.7% YOY but compared with the previous quarter, chemical production alone went up 4.9% driven by higher demand, VCI says. Average capacity utilization rose sequentially, from 77.5% to 81.6%, so operating rates were back to almost normal in the third quarter, VCI says.
Industry sales increased sequentially by 2.8%, to EUR43.8 billion (USD51.6 billion), with sales to domestic and foreign customers going up by 3.5% and 2.5%, respectively, VCI says. It adds that there was positive development especially in business with European customers. Nevertheless, sales to foreign customers were 8% lower YOY, and sales overall were 7.5% down YOY.
Germany-based chemical companies' selling prices were 2.6% lower YOY in the third quarter in line with weak oil prices and soft demand caused by COVID-19, VCI says. Crude prices went up by about 36% sequentially, but were almost 30% lower YOY, VCI says. The price of naphtha also increased sequentially by 50%, but remained 25% cheaper YOY.
VCI notes that the global economic crisis is far from over and with a second wave of infections building up, the industry’s optimism has been replaced by concern about the future, resulting in a deteriorated outlook for 2020. VCI continues to expect a production decline in the chemical-pharmaceutical industry of 3% for 2020. Prices are expected to be 2% lower, helping drive sales down 6% to €186.4 billion, VCI says.
Germany’s chemical-pharmaceutical industry faces a difficult fourth quarter, with COVID-19 threatening the industry’s recovery, VCI says. “Business and society are required to reduce the risk of infection through effective measures and correct behavior. The federal government must prevent permanent economic damage,” says Christian Kullmann, VCI president and chairman of Evonik Industries.
As MRC informed before, BASF has recetnly broken ground on a new cathode active materials production plant. The plant in Schwarzheide, Germany is scheduled to come online in 2022, creating 150 new jobs and will enable the supply of around 400,000 full electric vehicles a year. This new site will complement BASF’s multi-step investment plan in the European battery materials market, using precursors from the company’s previously announced plant in Harjavalta, Finland. The German government are putting €175m towards the project which is part of the Important Project of Common European Interest (IPCEI) approved by the European Commission in December 2019, under the EU State aid rule
We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-September output. September production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.
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