EU27 chemical business: Disappointing first half of 2025
The competitiveness of the European chemical sector remains well below pre-crisis levels (2014-2019 average), driven by weak demand and uncompetitive energy prices. This is particularly an issue for commodity products and petrochemicals, where China holds a competitive edge due to large-scale production and low production costs.
Compared to the USA, European gas prices were three times higher during January-July 2025, keeping European producers at a competitive disadvantage. Since March 2022, the EU27 chemicals business environment has been facing a limited demand and declining business confidence, intensified by geopolitical uncertainty.
At 74.6% capacity utilisation in the EU27, chemical sector remains a key concern. It has consistently stayed below the EU’s long-term average and the US average since Q3 2022, reflecting ongoing challenges from weak demand and declining business confidence. EU27 chemicals operating at 9.5% below pre-crisis capacity (2014–2019).
Trade dynamics further illustrate the strain. The EU27 chemicals trade surplus fell to €20.1 bn in 2025 (January-June), down 17% from €24.4 bn in 2024, largely due to increased import rates.
Recovery prospects remain uncertain. Demand increase is expected to be limited due to global weak economic conditions. The business trade environment in which European chemical companies are operating is exposed to high risks from global trade disruptions, including US tariffs. As a result, EU27 chemicals output is projected to decline in 2025, reversing the 2.4% growth seen in 2024.