FRANKFURT/HAMBURG — Europe’s chemical producers are facing fresh turmoil as US import tariffs disrupt global trade, prompting customers to delay orders and hitting demand in a sector struggling to recover from the region’s 2022 energy crisis.
The European Union’s fourth-biggest exporting sector after machinery, automotive and pharmaceuticals, has been grappling in recent years with high production costs after gas and power prices soared following Russia’s invasion of Ukraine.
That and slowing demand due to struggles in key industries have led some companies in the 655-billion euro ($767 billion) sector to close sites and cut jobs to save costs.
The European Union accounted for 12.6 percent, or 655 billion euros, of the world’s total chemicals sales in 2023, a decline or nearly 4 percent over the previous decade.
US import tariffs of at least 15 percent on goods from the EU have hit many of the industry’s main customers, including in the automotive, machinery and consumer goods sectors. Global automakers have booked billions of dollars of losses due to the damage done by President Donald Trump’s trade war.
Third-quarter earnings at European chemical companies are expected to fall 5 percent, following a 22 percent drop in the second-quarter, according to LSEG data.
“Since the energy crisis we’ve been hoping for a sustained recovery in volumes and margins in the European chemical sector,” said Thomas Schulte-Vorwick, an analyst at Metzler Research.
He said the tariffs and price and margin pressure due to stiff Asian competition at home and elsewhere made “a pretty toxic combination at the moment”. The industry’s biggest players – notably BASF, Brenntag BNRGn.DE, and – are somewhat protected from the direct import levies due to their strong US presence but are still affected by cautious customer behaviour.
