German Chemical Group Sees No Uptick of Demand in Europe
Germany’s chemical association VCI, which represents 1,650 chemical companies including BASF SE (BAS) and Lanxess AG (LXS), sees little chance of a rebound in demand in Europe, saying exports drove a “slight” gain in production.
Third-quarter production in the industry gained 1.5 percent while prices dropped 0.7 percent compared with the previous three months, the Frankfurt-based group said in an e-mailed statement today. It stuck to a forecast for full-year revenue to remain unchanged at about 184 billion euros ($238 billion) with production declining 3 percent compared with last year.
“The slight increase in production in the quarter is not a reversal of the trend,” VCI President Karl-Ludwig Kley said in today’s statement. “We are still successful in non-European markets and therefore could make up for sales deficits in the European Union.”
BASF, the world’s biggest chemical maker, on Oct. 25 cut for a second time this year its estimates for global economic growth, saying it expects no upturn in demand for its chemicals business in the last three months of the year. U.S. rival Dow Chemical Co. (DOW) said it will close factories, including plants in four European countries, and cut about 2,400 jobs.
Selling prices in 2012 are still expected to be 2.5 percent higher than last year on average, the VCI said.
Sales for the industry remained about the same at 44.9 billion euros in the third quarter compared to the previous three months, the association said. Domestic sales dropped 1 percent, while revenue abroad gained 1 percent, VCI said.
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