Europe is the second largest chemicals producer in the world

World chemical sales 2021, €4,026 billion

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A look at global chemical sales over the past ten years (2011-2021) shows:          

Global sales increased by 15.2% from €3,494 billion in 2020 to €4,026 billion in 2021. With 14.7%, the EU27 chemical industry ranks second in total sales, with the United States coming in third with 10.9%. Worldwide the competitive landscape has changed significantly over the last ten years. Today, next to the EU27, USA, Japan and mostly emerging countries from Asia rank in the top 10 in sales.

The so-called BRICS countries (Brazil, Russia, India, China and South Africa) accounted for nearly half of global chemical sales in 2021. Together with the EU27 and the USA the BRICS accounted for about three quarters of global chemical sales, in 2021. The remaining quarter of global chemical sales were generated mainly by emerging countries in Asia, including the Middle East. With €1,729 billion in 2021, China is the largest chemicals producer in the world, contributing 43% of global chemical sales in 2021.

China dominates chemical sales world ranking

Chemical sales by country: top 10

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Two of the top 10 country sales are American producers (the USA and Brazil), generating chemical sales of €479.7 billion (13.8%). Sales revenues in the US chemical industry increased significantly by 7.3% in 2021 compared to 2020. With €77.4 bn, business development in Brazil came back to normal in 2021 after the steep decline in 2020.

Three of the top 10 country sales are European producers (EU27 and Russia), generating chemical sales of €652 billion (16%).

The global landscape of the chemical industry is changing rapidly. China is moving from a “big country” to a “great power” of the petroleum and chemical industry, leading in technology innovation and trade, and prevailing in international markets.

EU27 market share dropped significantly

World chemical sales by country: top 10

The European chemical industry is still a world leader and a highly innovative sector. With 90% of GDP growth taking place outside Europe in the coming decades, the challenge is to stay competitive. Taking advantage of emerging market opportunities will require EU27 leadership in creating attractive framework conditions that enhance the global position of the European chemical industry.

The results also show a significant decrease in the share of chemical sales for the EU27, USA and Japan over the past ten years. The USA’s share of global sales went down from 15.3% in 2011 to 10.9% in 2021.  Japan‘s market share decreased from 6.3% to 4.7% in the same period.

China’s share of world chemicals market sales in 2021 grew to 43.0%, up from 28.3% reported in 2011. The EU27 contribution to world chemical sales dropped from 18.6% in 2011 to 14.7% in 2021. The EU27 gradually lost its top spot in world chemical sales to China.

World market share of EU27 chemical sales drops substantially

EU27 share of global chemicals market

Global chemical sales were 2.8 times bigger in 2021 than twenty years ago (€1,401 billion vs €4,026 billion).

In 2001, the countries forming today’s EU27 reported sales of €366 billion, making up 26.2% of world chemical sales in value terms. In 2021, sales values in the EU27 area were 62% above 2001’s levels. Because of steep growth in the global chemicals market, the relative share of the EU27 chemicals market has dropped substantially over the last 20 years, from 26.2% to 14.7%.

This trend is expected to continue in the future. Data analysis shows strong chemicals demand growth in China, and other emerging countries and low growth rates in Europe and North America, where Europe sells most of its chemicals.

Overall growth in demand and production of chemicals, as well as faster growth in emerging regions, will continue in the future. Growth in Europe remains low, mainly due to mature markets and an ageing population, while the EU27’s trade surplus remains high. Other structural factors will deeply affect the development of the chemicals business in the coming years such as immigration, digitalisation, populism, among others.

Besides, there are other potential reasons for this relative decline, including increased competition from other regions, comparably high energy prices, lagging innovation, currency appreciation, high labour costs, and regulatory and tax burdens. Sector research and development (R&D) intensity, energy prices and the exchange rate have strong quantitative impact on competitiveness.

Basic inorganics and petrochemicals account for more than one third of EU27 chemicals sales

EU27 chemical sales 2021 (€594 billion)

Output from the EU chemical industry covers three main product areas: base chemicals, specialty chemicals and consumer chemicals. Base chemicals, also known as commodity chemicals, cover petrochemicals and their derivatives (polymers) along with basic inorganics. They are produced in large volumes and sold in the chemical industry itself or to other industries.

The inorganic basic chemicals sub-sector includes production of chemical elements, inorganic acids such as sulphuric acid, bases such as caustic soda, alkalis and other inorganic compounds such as chlorine. The petrochemicals sub-sector covers manufacturing of chemicals using basic processes, such as thermal cracking and distillation. Polymers in primary forms are, in most cases, integrated into petrochemicals sites. Plastics in primary forms embrace the manufacture of resins, plastic materials and elastomers.

Specialty chemicals cover areas such as paints and inks, crop protection, dyes and pigments, and auxiliaries for industry (other chemicals such as glues, essential oils and gelatine). Specialty chemicals are produced in small volumes, but they nevertheless represented 28% of total EU27 chemical sales in 2021.

Consumer chemicals are sold to final consumers, such as soaps and detergents as well as perfumes and cosmetics. They represented 13.5% of total EU27 chemical sales in 2021. Petrochemicals and specialty chemicals accounted for the majority – 53.8% – of EU27 chemical sales that year.

Two thrid of EU27 chemical sales generated in four EU27 Member States

EU27 chemical sales broken down by country (2021)

Germany and France are the two largest chemicals producers in Europe valued at €274.7 billion, followed by Italy and the Netherlands. These four countries accounted for 66.2% of EU27 chemical sales in 2021, valued at €393.0 billion.  The share rose to 84.3%, or €500.3 billion, when including Spain, Belgium, and Austria. The remaining 20 Member States of the EU accounted for 15.7% of EU27 chemical sales in 2021, with Sweden and Poland being the biggest among them.

UK chemical sales reached €46.6 billion in 2021. EU27 chemicals exports to the UK reached €26.0 billion, while imports from the UK totalled €18.1 billion.

EU27 chemicals sales Increased significantly  in 2021

EU27 chemical sales structure (€ billion)

Total sales far above previous year’s level. Total sales of the EU27 chemical sector cover three categories: EU27, intra-EU27 sales, home sales and EU27 foreign sales (or extra-EU27 exports). Sales in 2021 increased by 22% compared to 2020.

Intra-EU27 sales extended 51% of their value in ten years. Intra-EU sales cover revenue generated by EU27 chemicals companies from selling in the EU27 single market but not into their home country market, (e.g. French companies selling their chemicals products in Belgium or Germany). Removing both trade and non-trade barriers inside the European Union with the single market helped boost growth and competitiveness in the EU27 chemical industry, increasing the number of chemical transport operations across EU27 borders. Intra-EU27 sales climbed from €230 in 2011 to €347 in 2021.

EU27 Home sales continued to lose ground: over the past ten years they lost 63% of their original value. Home sales represent chemicals revenue generated by EU27 chemicals companies from selling into their home country market (e.g. French companies selling their chemical products in France). From 2010 to 2020, EU27 home sales decreased on average by 6.2% per annum; home sales went down from €121 billion in 2010 to €63 billion in 2020.

EU27 Foreign sales increased by 38% of their value during the ten-year period. The European chemical industry is an export-oriented industry, with 33% of its production being sold outside the EU27. During the period 2011 to 2021, chemical exports outside the EU27 single market increased on average by 3.2% per annum. The chemical industry must continue to be globally competitive to sustain its existing capacity and grow in line with global demand.

€198.5 billion is generated from selling chemicals outside the EU27 area

EU27 chemical sales structure (%)

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EU27 Home Sales: In 2021, only 8% of chemical sales revenue was generated from selling in the EU27 country home market.

Intra-EU27 Sales: While “EU27 home sales” are declining, the importance of intra-EU27 sales is increasing. By 2021, intra-EU27 sales – excluding domestic receipts – accounted for 58% of total EU27 chemical sales, up from 45% in 2011. From 2011 to 2021, EU intra-EU27 sales increased on average by 4.2% per annum.

EU27 Foreign Sales: In 2021, 34% of chemical sales revenue was generated from selling in the non-EU27 chemical market (extra-EU27 exports), up from 29% in 2011. The three primary markets for EU27 chemical exports are the USA, UK and China.

More than half of (EU27+UK) chemicals are supplied to the industrial sector

Customer sectors of the EU27+UK chemical industry (2017)

The European chemical industry is a key pillar for a sustainable society, providing not only employment to 1.2 million people in Europe but also acting as a solution provider to other sectors of the economy: especially, for the sustainable development challenges such as energy and climate, transport, health, food, hygiene, housing, among others.

The chemical industry supplies almost all sectors of the Economy. Chemical manufacturers not only transform raw materials into final products for everyday consumption but also provide inputs to a broad range of sectors, from agriculture to transportation.

More than half of the EU chemicals sold to downstream users go to other industrial sectors, according to the Oxford Economics study (March 2019). Beyond chemical manufacturers, the biggest industrial users of chemicals are the rubber & plastics, textiles, construction, computer production, and pulp & paper sectors. Overall, 56% of EU chemicals sold to downstream users go to other industrial sectors. The remainder goes to other branches of the global economy such as health and social work, agriculture, and services.

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