European chemicals industry ends 2023 on ‘weak note’

Brussels – The European chemicals industry “produced less, exported less and imported less” in 2023, compared to the previous year, the European Chemical Industry Council (Cefic) has reported.

Two of the main drivers impacting the industry’s competitive edge were high energy costs and trade dependency in times of geopolitical disruptions, said Cefic in its January report, published 23 Feb.

Germany, it said, is “not yet recovering”, and full recovery “is still way off for most EU27 countries”.

But 2024 started on a somewhat brighter note, with confidence in the chemical industry “slightly improving” if still below the 'long-term average'.

Citing its latest economic survey, Cefic said chemicals production expectations in January went down for the second time since December last year.

However, it continues to remain “in the positive digits”, while assessments of stocks of finished products decreased slightly.

Managers’ opinions on the current level of overall order books also "shows significant improvement,” Cefic added.

Detailing the industry performance in 2023, Cefic said basic chemicals sectors continued to report a double-digit decline.

Output of petrochemicals in the EU was 10.6% lower compared to 2022, reflecting a marked downturn polymers at 10.5% year-on-year.

With moderate declines, basic inorganics and speciality chemicals saw declines of 5.2% and 6.3% year-on-year.

Consumers chemicals, including soaps, detergents and cosmetics, reported a 3.2% growth over 2022.

According to Cefic, due to the “weak business situation of the industry in general”, the output of chemicals declined significantly in 2023 in most producing countries, except for China, Russia and India.

Indeed, it noted, China last year reached its highest production levels since 2015, posting 9.6% growth over 2022 – contributing significantly to the overall 2.3% global production increase.

With overall chemicals prices falling worldwide, Cefic predicted that sales levels in the industry are likely to “go down markedly”.

“Weak global demand from key downstream sectors and persistently high energy costs will continue to weigh on the sector’s prospects into 2024,” Cefic warned.

China and key emerging countries will continue to play “a key role” in global demand, the report added.