Europe’s chemical sector ended 2023 weighed down by the challenges it had faced throughout the year, according to the European Chemical Industry Council’s (Cefic) latest monthly trends report, based mainly on data gathered in November, said Cefic.
Weakened confidence levels in the EU economy helped cause chemical industry sales to shrink and production to fall 8.7% year over year during the first 11 months of 2023, the report said. “Stress factors such as higher energy costs and a lack in demand are heavily impacting competitiveness of the chemicals industry in Europe,” Cefic said.
Business confidence in the EU chemical industry weakened slightly at the end of 2023, according to the Cefic report. “In December 2023, chemicals production expectations went down for the first time after four months of consecutive improvements. However, it continues to remain in positive digits for the fourth consecutive month,” it said.
Assessments of stocks of finished products decreased slightly toward the end of 2023, and chemical company managers see no improvement in the current level of overall order books. “The chemicals confidence indicator is still at a low level and no sign of strong recovery is observed yet,” Cefic said.
Capacity utilization in the EU chemical industry is still “significantly below” a year ago, the report said. Lower operating rates partly reflect the industry’s loss of competitiveness on global chemical markets due to high regional energy and feedstock costs, Cefic said.
Basic chemicals remain under particular pressure in Europe. EU output of petrochemicals was 11.7% lower in the first 11 months of 2023 than in the same period of the previous year, with polymer production dropping 11.4%. Basic inorganics production was down 6.2% year over year, and specialty chemicals output fell 6.8%. Consumer chemicals — principally soaps, detergents and cosmetics — are a bright spot with 3.5% year-over-year output growth in the EU during the first 11 months of last year.
Sales generated by the EU chemical industry dropped 15.5% year over year in the first 10 months of 2023, to €553 billion. Industry sales also showed a sequential monthly decline of 1% in October 2023 compared with September. October EU chemical industry revenue was 14.3% below the year-earlier level, Cefic said.
We remind, the European Chemical Industry Council (Cefic) carefully projects a possible 1.0% growth in EU27 chemical output for 2024. This flat to small growth comes after a challenging period marked by a decline of production by 7.6 % in 2023 and 6.3% decrease in 2022.
mrchub.com