Trends in the chemical industry
Trends in the chemical industry in 2012
- Growth in global chemical production (excluding pharmaceuticals) considerably slower than in previous year (2012: +2.6%; 2011: +3.8%)
- Increase in demand not as sharp as in 2011
- Chemical production in the European Union declines by 1.4%
- Price of Brent blend crude oil comparable with high level of previous year
Chemical production (excluding pharmaceuticals) in 2012
Real change compared with previous year
Global chemical production (excluding pharmaceuticals) grew by 2.6% in 2012 – significantly slower than in the previous year (+3.8%) and than our original forecast for 2012 (+4.1%). The upswing in demand expected for the second half of the year did not appear.
Compared with the previous year, growth in demand for products from the chemical industry (excluding pharmaceuticals) was significantly slower in 2012. This was largely attributable to weak economic development in the industrialized countries and restrained growth in many emerging markets. In anticipation of decreasing prices, many consumers of chemical products also showed caution in restocking their inventories.
After weak growth in the previous year (+1.7%), chemical production in the European Union declined by 1.4% in 2012. By the fourth quarter of 2011, production levels in Germany were already considerably below the year’s average; this decline could not be made up for in the course of 2012, so that production fell by an average of 3.1% for the year. Substantial production declines were posted in Italy and the United Kingdom, as well.
In the United States, chemical production rose by 2.5%, representing a slight increase compared with 2011 (+1.5%). The chemical industry there benefited from low gas prices as well as from high demand, especially from the automotive industry.
As a result of the general economic slowdown, chemical production in Asia (excluding Japan) posted a weaker growth dynamic than in the previous year (2012: +7.7%; 2011: +9.0%). Production increased by 10.6% in China, the world’s largest chemicals market; in India, it grew by only 1.3%.
In Japan, the chemical industry was unable to benefit as anticipated from reconstruction after the natural disaster in 2011; production declined by 4.5% (2011: –3.7%). The strong yen and high raw material costs impaired competitiveness on an international level. Substantial production cutbacks in key customer industries led to lower demand for input materials from the chemical industry.
At 1.9%, growth in chemical production in South America was weaker than in the past years (2011: +3.1%). In Brazil, production grew by only 1.4% due to slow growth in customer industries.
Price trends for crude oil (Brent blend) and naphtha ($/barrel, $/metric ton)Enlarge image
At an annual average of just under $112 per barrel in 2012, the crude oil price of Brent blend was around the same high level as in the previous year. Prices fluctuated widely over the course of the year. At the beginning of 2012, the price of oil increased sharply as a result of tension in the Middle East as well as rising demand; it reached its highest monthly average in March ($125 per barrel). The price of oil subsequently fell to a monthly average of $96 per barrel in June. In the second half of the year, factors such as the European Union’s embargo on oil from Iran led to a renewed increase in the price of crude oil.
Average monthly prices for the chemical raw material naphtha ranged over the course of the year from $1,065 per metric ton in March to $732 per metric ton in June. The average annual price of naphtha in 2012 was $937 per metric ton, comparable with the level of 2011.
The average annual price of natural gas in the United States was less than $3/mmbtu, a significantly lower level than in 2011 ($4/mmbtu). In the European Union, however, the average price of natural gas rose to more than $11/mmbtu, an increase of around 10% compared with 2011.