Europe’s chemical industry remains under severe pressure, with production falling, trade weakening and global competition intensifying despite a recent improvement in business confidence, according to the latest quarterly report from the European Chemical Industry Council (Cefic).

 

EU27 chemical production fell 2.0% between January and July 2026 compared with the same period in 2025, while weak demand and mounting structural competitiveness pressures continued to weigh on the sector. Cefic said there is still no sign of a broad-based or sustainable recovery.

 

Performance varied sharply across the bloc. Spain was one of the few bright spots, with chemical production rising 2.8%, while France stabilised. Output, however, declined across most other major chemical-producing countries.

 

The sharpest pressure remained concentrated in upstream industries, particularly other organic basic chemicals, polymers and crop protection products. Some specialty and consumer chemical segments proved more resilient.

 

Chemical sales rose 2.1% between January and June compared with 2025, but the increase was largely a price effect rather than evidence of stronger activity. Producer prices climbed 5.1%, meaning higher turnover did not translate into stronger production or demand.

 

Trade offered little relief. Between January and July, chemical exports fell 4.2%, while imports dropped 3.1%. As a result, the EU27’s extra-EU chemical trade surplus shrank by €2.2 billion to €21.4 billion.

 

Lower exports to the United States and continued weakness in other organic basic chemicals were key factors behind the deterioration. While the chemical trade volume deficit narrowed, Cefic cautioned that this was largely because imports fell faster than exports — not because European competitiveness improved.

 

The report points to a sector still caught between weak demand at home and intensifying competition globally. Falling production, upstream overcapacity and rising competitive pressure continue to constrain the industry, while chemical growth is becoming increasingly concentrated in China.

 

For Europe’s chemical producers, the latest figures suggest that improving sentiment has yet to translate into a meaningful turnaround in industrial activity.