© All images credited to press photo BASF
STRONG YEAR FOR EUROPEAN CHEMICALS Most chemical producers in Europe have enjoyed a remarkably good twelve months of strong prices, margins and profits, as Nigel Davis, Insight Editor, ICIS, reports.
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ome parts of the chemical industry have remained under pressure as European demand has recovered only slowly following the 2008/09 financial crisis and deep recession. But inventories have re-filled and supply chains become much more robust. The key driver for many products has been emerging market demand. China particularly has sucked in imports of chemicals and polymers. China’s stimulus programme has driven demand as has the money pumped by governments into economies in other parts of 8 Industry Europe
the world. And as China has boomed, so chemicals demand growth has rebounded strongly in countries like Brazil and India. The combination of returning domestic growth and rapidly expanding overseas markets has pushed up sales and helped lift earnings. Chemical firms in Europe, and indeed globally, coped well with the downturn. Production plants were shuttered at the end of 2008 and in the early part of 2009. Companies hunkered down, cut costs and stocks as they sought to reduce the demand
for working capital. Only slowly did capacity come back on-stream dictated by recovering downstream markets. By 2010, most players in the sector found they were responding to better times. The first half of the year was good and while demand growth in Europe appeared to level off in the third quarter, the year produced record results. Industry giant BASF, the world’s largest chemical company, posted record 2010 financial results and entered 2011 in confidence. The situation was similar across the sector. Match-
