Dwindling Confidence in the Industry - EU chemicals production recorded a 1.9% decrease in the first four months of 2012 compared with the same period in 2011, according to the latest Cefic Chemicals Trends Report. Monthly data for April 2012 showed a 1.9% decline compared with April the year prior. April 2012 data show that the EU chemicals production level remains 5.2% below the peak in 2007.

Prices for chemicals in the European Union continued to climb on a year-on-year basis in April, up 3.2% during the month against the comparable month in 2011. The price increase was led yet again by the overall price increase in basic inorganics. Latest trade data show the EU chemicals trade net trade surplus improved through the first quarter of 2012 by €2.4 billion compared with the same period of last year, reaching €12.5 billion. According to the latest EU Commission survey from May 30, confidence in the EU chemicals industry deteriorated in May, based mainly on a strong deterioration in managers' expectations for the months ahead.

Year-on-Year April Chemicals Output Lower

Consumer chemicals was the only subsector to avoid a drop in the April EU chemicals production index, up 1.6% in April 2012 compared with April 2011. Specialty chemicals and basic inorganics production decreased in April by 4.2% and 3.8% respectively on a year-on-year basis. Polymers production declined in April 2012 by 2.7% against the comparable period the year prior. Petrochemicals experienced no change in the same period. Monthly data for April 2012 showed a 1.9% decline for the EU chemicals industry compared with April the previous year.

EU Trade Surplus Improved by €2.4 Billion Through First Quarter of 2012

March 2012 trade data indicate a €12.5 billion overall EU chemicals net trade surplus. An EU net trade surplus with the NAFTA region contributed significantly to the additional surplus generated in January-March, reaching €3.3 billion, up €1.3 billion compared with the period from January to March 2011. The EU net trade surplus with the rest of Europe was €3.4 billion in first quarter 2012, up €500 million compared with first quarter 2011. A €1.5 billion surplus occurred with Asia, excluding Japan, and China, which fell €500 million compared with first quarter 2011.

Prices for Basic Inorganics Climbed by 4.4% in April

Year-on-year EU chemicals prices rose in April by 3.2%, driven by the price for basic inorganics, which increased by 4.4% during the period. Prices for petrochemicals climbed by 2%, while pharmaceuticals prices edged down by 1.2% in April as compared with the year prior.

EU Sales in January-March 2012 6.1% Higher Than 2008 Precrisis Period

EU chemicals sales for March 2012 were 1.4% lower compared with March the year prior. The overall sales level continues to surpass the precrisis peak reached at the beginning of 2008. Compared with full-year sales levels in 2008, the total value of sales through the first three months of 2012 was 6.1% higher.

EU Chemicals Confidence Indicator (CCI) Falls in May 2012

According to the latest EU Commission report (business and consumer survey results, May 30, 2012), confidence in the EU chemicals industry deteriorated markedly (-5.4%) in May 2012, based mainly on a strong deterioration in managers' expectations for the months ahead (-8.5%). Moreover, managers' assessment of their companies' current level of order books deteriorated sharply (-4.2%). Also, the assessment of the adequacy of current level of stocks of finished products worsened. Managers' assessment of their companies' past production and current level of export order books also deteriorated. Employment plans were further revised down. At the same time, selling price expectations decreased modestly.