Cefic: The EU chemical industry remains under pressure

The European Chemical Industry Council (Cefic) released its latest monthly trend report based on data collected in November last year, saying that the European chemical industry is still under significant pressure.

In the first 11 months of 2023, weakening confidence in the EU economy led to a contraction in the EU chemical industry's sales, with production down 8.7% year on year, according to Cefic. "Pressure factors such as rising energy costs and lack of demand are seriously affecting the competitiveness of the European chemical industry," Cefic said. China's huge new chemical capacity, in particular, will add to Europe's woes.

Cefic said there were signs of recovery in some chemical segments. In November 2023, EU chemical production was about 1 percent above the previous year's level and 1.6 percent higher than the previous month, but "it is too early to confirm whether the upturn will stabilize."

The Cefic report said business confidence in the EU chemical industry weakened slightly at the end of 2023. The assessment of stocks of finished goods declined slightly, and the overall order level is still not improving. Chemical confidence indicators remain at low levels and no signs of a strong recovery have been observed.

Capacity utilization in the EU chemical industry remains significantly lower than a year ago, the report said. Cefic said the lower operating rate partly reflected the industry's loss of competitiveness in the global chemical market due to high energy and feedstock costs in Europe. In the first 11 months of 2023, EU petrochemical production was 11.7% lower than the same period last year, polymer production was 11.4% lower, basic inorganic production was 6.2% lower than the same period last year, and specialty chemical production was 6.8% lower. Consumer chemicals such as soaps, detergents and cosmetics were a bright spot, with EU production up 3.5% in the first 11 months of last year compared with the same period last year. In the first 10 months of 2023, sales of the EU chemical industry fell 15.5% year-on-year to €553 billion.