GERMAN CHEMICAL INDUSTRY
Loss of recovery momentum in Q2 / Sales down despite higher production
By Marilyn Gerlach
 VCI managing director Wolfgang Große Entrup (Photo: VCI) |
Second-quarter headwinds in the German chemical-pharmaceuticals industry have weakened the recovery trend evident in the first quarter, with sales declining 0.6% and capacity utilisation rates slipping further down to below profitable levels, according to Germany’s chemical industry association VCI (Frankfurt; www.vci.de).
VCI attributed the development to cutbacks in Germany’s overall industrial production during the April-June period and to the restrained level of new orders for chemicals. Demand from abroad was also down, it said.
Because new orders were not enough, several chemical plants operated at levels that were not profitable. Additionally, energy prices and raw materials costs have accelerated again most recently, VCI said.
Excluding the pharmaceutical industry, chemicals production rose 8.4% year-on-year. Yet despite the increase, the manufacturing plants had an average utilisation rate of only 75.1% compared with the 78.1% in the first quarter.
Related: GKV and VCI hand in strongly worded letter to Chancellor Scholz on PFAS
Production climbed 3.7% year-on-year, but sales have not kept up with the pace of production growth and has in fact declined by 0.6% largely due to a 1.2% drop in domestic sales.
In the plastics-relevant petrochemicals and polymers industries, the situation was different. Production jumped 16.9% at petrochemicals and 6.7% at polymers. In terms of sales, petrochemicals had an uptick of 3.9%, while polymers were down 0.1%.
VCI managing director Wolfgang Große Entrup said, “The mood in our industry has again cooled down noticeably because the global economy has failed to live up to expectations and did not pick up speed. There are no signs of a sustained upturn in demand up until now. At the same time, competitive pressure is getting stronger.”
For the whole year 2024, the VCI held on to its forecast of a 3.5% production increase. Despite declining prices, it expects sales to expand by 1.5%.
VCI attributed the development to cutbacks in Germany’s overall industrial production during the April-June period and to the restrained level of new orders for chemicals. Demand from abroad was also down, it said.
Because new orders were not enough, several chemical plants operated at levels that were not profitable. Additionally, energy prices and raw materials costs have accelerated again most recently, VCI said.
Excluding the pharmaceutical industry, chemicals production rose 8.4% year-on-year. Yet despite the increase, the manufacturing plants had an average utilisation rate of only 75.1% compared with the 78.1% in the first quarter.
Related: GKV and VCI hand in strongly worded letter to Chancellor Scholz on PFAS
Production climbed 3.7% year-on-year, but sales have not kept up with the pace of production growth and has in fact declined by 0.6% largely due to a 1.2% drop in domestic sales.
In the plastics-relevant petrochemicals and polymers industries, the situation was different. Production jumped 16.9% at petrochemicals and 6.7% at polymers. In terms of sales, petrochemicals had an uptick of 3.9%, while polymers were down 0.1%.
VCI managing director Wolfgang Große Entrup said, “The mood in our industry has again cooled down noticeably because the global economy has failed to live up to expectations and did not pick up speed. There are no signs of a sustained upturn in demand up until now. At the same time, competitive pressure is getting stronger.”
For the whole year 2024, the VCI held on to its forecast of a 3.5% production increase. Despite declining prices, it expects sales to expand by 1.5%.
12.09.2024 Plasteurope.com [256158-0]
Published on 12.09.2024
German version of this article...