EU Chemical Production Increased by 1.2% in August 2023

In late October, the European Chemical Industry Council (Cefic) released a monthly report showing that EU chemical production increased by 1.2% in August compared with July. While this increase "exceeded expectations," it was still 5.9% below August 2022.

Cefic said that in the first eight months, EU chemicals production fell by 11.2% compared with the same period in 2022, as the spillover effects of the 2022 energy crisis are severely affecting most industries in Europe in 2023. Although European natural gas prices have fallen significantly, they are still 60% higher than the average level from 2015 to 2019.

The latest analysis shows that Poland, the Netherlands and Germany are the EU countries most affected by the energy crisis. In the first eight months, their chemical production dropped by more than 14%, with Poland dropping by 18%.

In addition, the EU's basic chemicals industry experienced a double-digit decline in output in the first eight months. Among them, the output of petrochemicals dropped by 16.6% year-on-year, the output of polymers dropped by 14.7%, and the output of basic inorganics dropped by 9.6%. Cefic said specialty chemicals production declined by a relatively modest 7.1%. Consumer chemicals such as soaps, detergents and cosmetics continue to perform well compared to other chemicals sectors.

Cefic data also shows that in the first eight months, the EU chemical industry's capacity utilization rate averaged 74%, similar to the level during the 2020 COVID-19 epidemic; sales fell by 14.9% year-on-year, indicating that the income situation of chemical companies continues to be difficult.

Relevant people pointed out that the EU chemical industry has always been an export-oriented industry, with 30% of output used for export. Reduced trade and weaker global demand in key downstream sectors, coupled with high energy and regulatory costs, will continue to impact the industry into 2024.