The latest quarterly report from the European Commission for the Chemical Industry (Cefic) showed signs of a recovery in the European Union's chemical production in the third quarter, with a significant 6.1% increase in output compared with the second quarter's consecutive decline.

According to the report, in the first nine months of this year, chemical production in the EU fell by 4.4 per cent compared to the same period last year, mainly due to the outbreak of COVID-19 in Europe. Overall manufacturing output in the European Union fell sharply, down 10.6 per cent year on year, with car production down more than 28 per cent, Cefic said. The price of chemical products in Europe fell 5.0 percent year on year, with total sales of the chemical industry in the first eight months falling 9.0 percent year on year to 318.2 billion euros ($379.2 billion), due to weak demand within Europe and deteriorating trade and business conditions. Exports of chemicals from outside the EU fell 5.5 per cent to €111.7bn in the first eight months of the year, while imports from outside the EU fell 3.9 per cent to €86.4bn in the same period.

Cefic noted that the industrial recovery that began in May was showing signs of slowing as European countries reported a second wave of outbreaks. The duration and severity of the second wave will affect the level of chemical production in the EU. "Hence the greater need and urgency to approve the implementation of the EU Economic Recovery Plan. The plan also needs to be firmly integrated into the EU industrial strategy and the green agreement agenda. Only in this way can we ensure a sustainable industrial transformation." Marco Mensink, DIRECTOR-GENERAL of Cefic.

According to Cefic, France and Italy were the EU countries with the biggest declines in chemical production in the first three quarters of this year, with both falling by at least 10 per cent year on year, followed by Spain, Belgium and Portugal. Poland was the least affected country, with output unchanged year on year, while output in Germany and the UK fell by 3.6% and 1.7% respectively. In the EU, capacity utilisation remained 7.7 per cent below last year's level.

Global chemical production fell 1.8 per cent year-on-year in the same period, with China the only major producer to report year-on-year growth in the first nine months, at 0.7 per cent. Cefic points out that ChemChina's output is already v-shaped, with production levels in September at an all-time high. Low demand in key global customer sectors slowed growth in chemical production in all other countries, with India and Japan recording the biggest declines of 10.4% and 9.4%, respectively.