European Chemical Industry:
Cefic Chemicals Trends Report (CTR)
Cefic Industrial Policy Programme
30 May 2017
Dr Moncef HADHRI, Cefic Industrial Policy,
Economic Affairs, [email protected]
The IFO World Economic Climate has
continued to improve since Q3-2016
 Experts’ assessments of the current economic situation were considerably more positive,
making their sharpest increase since January 2013.
 The main drivers remained the advanced economies, and especially the EU; both
economic situation and expectations continued to follow an upwards trend in most
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countries. Expectations also improved
World Economic Climate improved markedly
in the second quarter of 2017
 The ifo World Economic Climate improved markedly in the second quarter of 2017,
with the indicator rising from 2.6 points to 13.0 points.
 Experts’ assessments of the current economic situation were considerably more
positive, making their sharpest increase since January 2013.
 Economic expectations also improved. A further recovery was seen in the world
economy in the second quarter.
 The ifo World Economic Climate improved in nearly all regions of the world. The
main drivers remained the advanced economies, and especially the European
Union. Both assessments of the current economic situation and expectations
continued to follow an upwards trend in most countries.
 There was also a significant improvement in the developments and outlook for
emerging and developing economies
 Africa and the Middle East were the only regions in which the economic climate
deteriorated moderately than previously.
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Significant improvement for both EU and
emerging and developing Asia
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EU chemicals* business confidence has
continued to improve since Q2-2016
*Chemicals excluding pharmaceuticals (Nace 20)
 The chemical business situation at present became more favourable in the first
quarter of 2017. Prospects for the coming months moved in a positive direction. The
business climate improves since Q3-2016,
 Total order-book levels of chemicals continued to increase and employment
expectation for the months ahead continued to follow an upwards trend. There was
also a significant positive changes in selling price expectation for the next six months.
 Chemicals business confidence follows an upward trend for the fourth consecutive
quarter. It is now above the long-term average.
EU chemicals* output: good start to 2017
The highest level in 8 years
 Output in the EU chemicals sector grew 2.3 % through March 2017 (y-o-y),
 All big chemicals sectors posted positive output growth. Production saw a significant
increase in Plastics (5.1%), Basic Inorganics (2.4%), “dyes and pigments (2.3 %)” and
cosmetics (1.9%). However, output saw a decline in crop protection (-2.6%) and
fertilizers (-0.4%) and paints and coatings (-0.1%), no significant growth for specialty
chemicals (0.6%)
 Output in chemicals is 3.2 % below the first quarter of 2008. It is also slightly above
Q1-2011 (peak level after the crisis). It is the second highest level since Q3-2008.
 Growth Q1-2017 (y-o-y), GDP (1.9%), Manufacturing (1.9%), and Chemicals (2.3%)
Chemicals* capacity: The second highest level
for 6 years (Q1-2011-Q1-2017)
*Chemicals excluding pharmaceuticals (Nace 20)
 Capacity utilisation: Q1-2017, It is 1% more compared Q4-2016. This represents the
fourth + consecutive growth since Q2-2016.
 It is the second highest value for six years (Q1-2011, Q1-2017)
 Capacity grew in line with production during the past quarters.
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Chemical* capacity: Uneven developments
between EU countries
*Chemicals excluding pharmaceuticals (Nace 20)




Capacity utilisation: Positive development in Spain and Germany and the EU28
Flat trend in Italy and slightly down in Q1-2017 compared to Q4-2016
Strong decline in UK in 2017 (-9%)
All countries are above the long-term average (2008-2013)
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EU capacity is 1.1% below the peak level
over the past nine years (2008-2017)
*Chemicals excluding pharmaceuticals (Nace 20)
Comparing Q1-2017 to peak level over the past nine years (2008-2017)
 It is far below its peak level in UK (-9.7%), and Italy (-6.5%), over the past 9 years,
 It is slightly below in Spain (-2.0%), Germany (-1.9%) and France (-1.5%)
 It is very close to its peak level in Belgium (-0.5%) and Poland (-0.4%)
 It is equal to its peak level in the Netherlands
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For the first time in four years, prices* were
above the previous year’s level
 The upward trend of prices for chemical products accelerated in the 1st quarter 2017,
with prices rising by 3.7% against Q4-2016.
 For the first time in four years, producer prices were above the previous year’s level
also in a twelve-month comparison (+5.8%, Q1-2017 vs. Q1-2016)
 All big chemicals sectors posted positive growth on prices. Petrochemicals saw
impressive price growth (15.1%), Polymers (2.9%) and Dyes and pigments (3.9%)
Chemicals* sales reached in Feb-2017 the highest
sales level since Feb-2014 (three years time)
*Chemicals excluding pharmaceuticals (Nace 20)
 Sales in EU chemicals reached in Feb 2017 the highest level since Feb-2014
 The chemicals industry’s sales estimated to grow in the first quarter of 2017 by 2.4%
compared to the previous quarter.
 Sales value estimated to reach €130.1 billion in Q1-2017, up by 6.4% in comparison
with the same quarter of last year (y-o-y).
 Both domestic and foreign business are expected to be developed positively during the
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first quarter of 2017
All big chemicals* sectors posted positive output
growth in Q1-2017
*Production figures on chemicals sectors are not comparable; they did not have the same degree of country coverage
 The positive growth of Polymers is attributable to Plastics (5.1%, 90%) and
synthetic rubber (2.3%).
 *Production figures on chemicals sectors are not comparable; they did not have
the same degree of country coverage
Most sectors* have exceeded the Q1-2011 level
*Chemicals excluding pharmaceuticals (Nace 20)
 Most key chemicals sectors reached the peak level after the crisis (Q1-2011).
 Polymers (6.3%), Specialty chemicals (5.2%), Consumers chemicals (2.6%), Basic
inorganic (2.4%), Chemicals (0.5%),
 However, some sectors are far below the peak level such as Fertilizers (-5%), Soaps and
detergents (-5.6%), Paints (-8.7%), Man-made fibres (-10.5%), Synthetic rubber (-14.9%)
and Petrochemicals (-20.7%)
The chemicals* trade surplus was €47.6
billion in 2016 (7.5%)
*Chemicals excluding pharmaceuticals (Nace 20)
 Surplus (in value) in 2016 was 7.5% higher than in 2015.
 However, trade flows figures showed less positive picture: the overall increase in trade
surplus (additional €3.3 billion) is due mainly to a strong decline in imports (-3.4%) with
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no positive changes on exports (-0.1%).
Chemicals* sales to Asia, the USA and China are
driving up EU trade performance (Jan-Feb-’17)
*Chemicals excluding pharmaceuticals (Nace 20)
 EU chemicals sector exports reached the value of €25.1 billion in Jan-Feb 2017. The
overall exports went up by 2.5 billion through (y-o-y, +11.1%).
 All chemicals sectors posted an increase of exports. The largest increase was with Rest
of Asia, the USA and China.
 EU imports valued at €17.1 billion in the first two months of 2017. EU imports went
down by €326 million during the same period (-1.9%, y-o-y).
 The chemicals trade surplus was €7.9 billion through February 2017. Overall, the
surplus went up by €2.8 billion through February 2017 (y-o-y)
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Summary of Key findings*: Top Indicators
*Chemicals excluding pharmaceuticals (Nace 20)
Outlook for Chemicals*: 2017-2018
Chemicals: 2016 (0.5), 2017 (1.5), 2018 (1.0)
Q1-2017 (2.3% y-o-y, 0.4%, p-o-p)
*Chemicals excluding pharmaceuticals (Nace 20)
 Following years of stagnation since the economic crisis, output growth has been less
than 1% on average during the past five years, which shows that the chemical sector in
Europe will have to find new ways to deliver strong growth for the long-term. Energy and
feedstock costs are playing a key role on chemicals competitiveness in Europe.
 Looking ahead, Cefic expects chemical production to grow by 1.5 % in the current year.
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Production is expected to follow moderate growth next year of 1.0 %
Summary of key findings-1
 The World Economic Climate improved markedly in the second quarter of 2017. Significant
improvement for both EU and emerging and developing Asia.
 European manufacturing is expected to grow significantly in 2017 helped by strong
domestic and external demand. Growth in European manufacturing is still supported by the
automotive sector but most sectors will contribute to growth in 2017.
 EU chemicals business confidence follows an upward trend for the fourth consecutive
quarter. It is now above the long-term average. Prospects for the coming months moved
in a positive direction. The total demand experienced by chemical companies is up.
 The EU chemicals industry looks back on promising first quarter of the current year 2017.
 Output raised in most chemicals sub-sectors, production reached the highest level for eight
years. Capacity utilisation of plants reached a peak value. The upward trend of prices
accelerated at the beginning of the year and for the first time in four years, producer prices
were above the previous year’s level.
 Sales: Larger production volumes and the persistent upward trend of producer prices
brought a clear rise in sales. The positive development of industrial demand and
encouraging construction activities inspired the chemical business in the EU market.
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Summary of key findings-2
 Trade Development: Foreign demand for the EU chemicals sector saw a positive
development through Feb-’17. Exports went up significantly and generated an additional
export surplus of €2.5 billion. EU Sales to the USA, China and Rest of Asia contributed
largely to this improvement. All chemicals sectors posted positive changes.
 Uncertainty: The key question is to know whether the latest positive developments in the
EU chemicals business will follow the present encouraging trend. Uncertainties and major
political risks could make for a less positive story for the coming months
 Looking ahead:
 Chemicals output saw a good start in 2017: Following years of stagnation since the
economic crisis, overall, output growth was less than 1% on average during the past 5 years,
which shows that the chemical sector in Europe will have to find new ways to deliver strong
growth for the long-term.
 Chemical output is expected to grow by 1.5 % in the current year. Production is expected to
follow moderate growth next year (1.0 % growth).
 Total sales of the EU chemicals business are expected to reach €540 billion in 2017. With
1.5% output growth, the industry’s sales should grow by about 3.5%.
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A1. Chemicals* output growth (year-on-year)
*Chemicals excluding pharmaceuticals (Nace 20)
A2. Chemicals* prices growth (year-on-year)
*Chemicals excluding pharmaceuticals (Nace 20)
EU chemicals* sales by sub-sector (year 2015)
*Chemicals excluding pharmaceuticals (Nace 20)