Europe’s Chemicals Industry Stalls Again as Cefic Cuts 2025 Outlook

The European Chemical Industry Council (Cefic) has slashed its 2025 production outlook, warning that chemical output across the continent will fall this year, after previously forecasting 0.5% growth. The revision underscores the fragility of Europe’s industrial base as global demand weakens and competitiveness remains under pressure.

In 2024, European chemical production managed a modest 2.4% increase, but the rebound has now lost momentum. According to Cefic, the outlook remains clouded by a weak global economy and high trade risks, including U.S. tariffs and other disruptions to global supply chains.

Capacity and Competitiveness Under Strain 

Cefic projects capacity utilization will drop further to 74.6% in Q3 2025, down from 75.6% in Q2. “The competitiveness of Europe’s chemical sector remains far below pre-pandemic levels,” the group stated, citing weak demand and structurally higher energy prices as enduring headwinds. Basic chemicals and petrochemicals are under particular strain, as producers struggle to offset costs in a market that offers little pricing power.

Production, Sales, and Trade Trends 

In the first half of 2025, chemical production fell 2.4% year-on-year, leaving output roughly 10% below pre-pandemic levels. With prices flat and demand stagnant, sales revenue dropped 1.8% year-on-year.

Trade offered little relief. Exports edged up just 0.5% in H1 2025, while imports surged 5.4%, eroding the industry’s traditional surplus. The chemical trade balance slipped to €20.1 billion, a 17% decline compared with the same period last year.

Demand Weakness Persists 

Cefic emphasized that a recovery in domestic demand is the only realistic path to significant growth, but so far no such turnaround has materialized. Most downstream customers remain pessimistic about business prospects, limiting restocking and new orders. Without a revival in Europe’s internal market, the industry faces the risk of stagnation even as global peers shift to higher growth regions.

Bottom line: Europe’s chemical industry is caught in a squeeze—high energy costs, weak demand, and trade risks are undermining competitiveness. Unless domestic demand revives or policy support improves, the sector risks further erosion of its global position.