European chemical production declined by 0.5% year over year (YOY) in 2018, having risen by 0.2% YOY through September, according to Cefic. The fall in production was caused by the higher price of oil, lower demand for chemicals from the automotive sector, and by unusually low water levels in European rivers, which caused transportation delays, Cefic says.
Cefic says that it is expecting modest growth of 0.5% in 2019, compared with 2018. Although the industry is expected to recover from a decline in demand from the automotive industry in 2018, performance in 2019 might be impacted by trade tensions between the United States, China, and Europe, not to mention uncertainty around Brexit, according to Cefic. Investors and customer industries are becoming more cautious in this volatile environment, Cefic says. Demand from the automotive, agricultural, and construction sectors, the key customers of the chemical industry, is predicted to increase slightly in 2019, according to Cefic.
“We remain cautiously optimistic about the 2019 prospects,” says Marco Mensink, director general, Cefic. “The forecast 1.5% growth of manufacturing industries should be sufficient to keep demand for chemicals at the same or higher level in 2019,” he says.
By Michael Ravenscroft
Source: Chemical Week
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