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German chemical industry feels tail wind—first-half output up 3%

2:35 PM MDT | July 10, 2014 | Michael Ravenscroft

The chemical industry in Germany is starting to feel the wind in its sails, chemical trade association VCI (Frankfurt) said at a press conference today. Domestic production of chemicals and pharmaceuticals rose by 3%, with sales revenue up by 2% in the first half of 2014, compared with the year-ago period, VCI says. Domestic sales to industrial customers rose to €40 billion ($54.4 billion), or 3.5%, according to VCI. Foreign demand for specialty chemicals and pharmaceuticals also increased. Exports increased to €58 billion, or 1%, year-on-year (YOY). Chemical imports in Germany increased by 4% as a result of industrial demand. Prices fell by 2% in first-half 2014, compared with a year ago. Stable raw material prices and increasing demand have resulted in price increases being implemented in the last few weeks, according to VCI. Capacity utilization in the industry reached a level of 85%. Employment in the German chemical industry rose by 0.5% in first-half 2014, to reach 440,000.
“The mood in the industry is good,” says Karl-Ludwig Kley, president, VCI and chairman of Merck KGaA. “The order books are being filled by increasing domestic demand. Business in our European home market is even better,” Kley says. “Our companies are confident that this development will continue into the second half of the year,” he adds. Demand from the United States and Eastern Europe is providing some tail wind. On the other hand, the industry is also seeing little growth impetus from Asia and from Latin America, according to Kley.
Production of fine and specialty chemicals climbed by 6% YOY, with production of consumer chemicals up by 2.5%, VCI says. Basic chemicals are still under pressure, according to VCI. Polymer production fell by 1.5% compared with a year ago, and production of inorganic chemicals fell by 3.5%. Production of petrochemicals, on the other hand, increased by 0.5% versus a year ago.
Foreign sales with North America increased by 5% YOY, with pharmaceuticals and specialty chemicals experiencing high demand, VCI says. Sales in Asia rose by only 0.5% compared with a year ago. Business with Latin America and Africa suffered a large decline in sales: 10.5% in Latin America and 3.5% in Africa.
VCI says its prognosis for the full year 2014 remains at a growth in production of chemicals and pharmaceuticals of 2%. Prices are expected to fall slightly, by 0.5%, and sales are expected to increase by 1.5%, to reach €193 billion.













 
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