European chemicals production will stop growing in 2012
According to the latest data released by the German Chemical Industry Association (VCI) and the European Chemical Industry Council (Cefic), the European debt crisis is increasingly dragging on the chemical industry in the region. VCI forecasts that the German chemical production in 2012 will be 3% lower than in 2011. Cefic said that in 2012, European chemical production will stop growing.
VCI has lowered its production forecast for the German chemical industry for the entire year of 2012. The current VCI predicts that the German chemical production in 2012 will decline by 3% compared with 2011. The agency had previously forecast zero growth in chemical production in Germany this year. The reduction is based on the grim situation in the second quarter of this year when German chemical production fell by 2.8% from the first quarter.
Klaus Engel, president of VCI and chairman of Evonik Industries, stated: “From the current situation, we will be forced to delay the hope of steady growth in the chemical business. The current debt crisis in Europe has affected the company’s In Germany’s industrial activities, most of our customers are cutting production and reducing chemical purchases.â€
VCI also revised its forecast for German chemical industry sales this year. VCI forecasts that sales revenue for the German chemical industry this year will be unchanged from 2011, at 184 billion euros. The previous forecast is 1% higher than 2011, reaching 186 billion euros. In the second quarter, sales revenue of the German chemical industry fell by 0.5% from the first quarter to 45.2 billion euros, but the chemical price rose by 1.4%.
At the same time, Cefic’s latest data show that the EU’s chemical production in the first half of this year decreased by 2.4% compared with the same period of last year. In June of this year, chemical production in the EU dropped by 2.2% year-on-year; chemical prices fell by 1.2% from the previous month.
Cefic issued a report at the end of June this year and stated that due to the impact of the European debt crisis, European chemicals production will stop growing in 2012. Cefic President Hubert Mandley pointed out that the demand for chemicals in Europe this year fell slightly compared with 2011, because the overall business climate in the EU continued to weaken, and EU member states implemented tight fiscal policies, leading to corporate orders. Reduction, but also make the company's inventory can only be maintained at a low level. In fact, this year chemical production stopped growing rather than negative, and this expectation was based on Cefic's more optimistic assumptions. Cefic assumed that the debt problems of European governments and the weak performance of banks will not spread in EU member states. It also assumes that the major export markets of the two European companies, the United States and China, will continue to grow strongly in the future.
At the end of the first quarter of this year, heads of chemical companies in Europe and the United States also expect that the demand for chemicals will turn stronger in the second half of this year, but now it seems that signs of improvement have not appeared. Kevin Swift, chief economist of the American Chemical Industry Council (ACC), said that the recent mixed economic indicators in the United States are mixed and the economy has picked up slowly. At the same time, China’s economy has continued to weaken and dragged down the demand for petrochemical products. China is Asia's largest economy and it is also the world's major importer of petrochemical products. In the predicament of the debt crisis in the Eurozone, external demand weakened and there was no sign of rebound in China's manufacturing activity.
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