Europe is the second largest chemicals producer in the world
World chemical sales
A look at global chemical sales over the past ten years (2009-2019) shows:
World chemicals sales was valued at €3,669 billion in 2019. Global sales grew by 4.1% from €3,525 billion in 2018 to €3,669 billion in 2019.
With 14.8%, the EU27 chemical industry ranks second in total sales, with the United States coming in third with 13.8%. Worldwide the competitive landscape has changed significantly over the last ten years. Today, next to the EU 27, US and Japan 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 47.2% of global chemical sales in 2019. Together with the EU27 and the USA the BRICS accounted for more than three quarters of global chemical sales, in 2019. The remaining quarter of global chemical sales were generated mainly by emerging countries in Asia, including the Middle East. With €1,488 billion in 2019, China is the largest chemicals producer in the world, contributing 40.6% of global chemical sales in 2019.
China dominates chemical sales world ranking
Chemical sales by country: top 10
European chemical sales decreased by 1.2% from €550.2 billion in 2018 to €543.4 billion in 2019. One of the top 10 are EU27 producers generating sales revenue of €617.3 billion (16.8%).
Two of the top 10 country sales are American producers (the USA and Brazil), generating chemical sales of €569.8 billion (15.5%). Sales revenues in the US chemical industry grew significantly by 8.4% in 2019 compared to 2018. Business development in Brazil did not improve in 2018, with a 4.1% decline in sales revenue.
The global landscape of the chemical industry is changing rapidly. China is taking its chemical industry to the next stage of development and is looking to move from “following the lead” to “taking the lead” and 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 as emerging markets surge
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 European chemical industry.
The results also show a decreasing share of chemical sales for the EU27, USA, Japan, Taiwan and Brazil over the past ten years. The USA’s share of global sales went down from 17.0% in 2009 to 13.8% in 2019. Japan‘s market share decreased from 6.9% to 4.6% in the same period.
China’s share of world chemicals market sales in 2019 grew to 40.6%, up from 24.1% reported in 2009. The EU27 contribution to world chemical sales dropped from 20.8% in 2009 to 14.8% in 2019. The EU27 gradually lost its top spot in world chemical sales to China.
World market share of EU27 chemical sales drops by half
EU27 share of global chemicals market
Global chemical sales are three times bigger in 2019 than twenty years ago. Global chemical sales have been growing consistently since 1999, expanding three times (in nominal terms) in 2019 (€1,172 billion vs €3,669 billion)
In 1999, the countries forming today the EU27 reported sales of €313 billion, making up 26.7% of world chemical sales in value terms. In 2019, sales values in the EU27 area increased by 73% compared to their original value of 1999. Because of steep growth in the global chemicals market, the relative share of the EU27 chemicals market nearly halved over the last 20 years, dropping from 26.7% to 14.8%.
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 EU’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.
Base chemicals account for about 59% of EU27 chemicals sales
EU27 chemical sales 2019 (€543 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.
Base chemicals represented about 59% of total EU27 chemical sales in 2019. 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 26.2% of total EU27 chemical sales in 2019.
Consumer chemicals are sold to final consumers, such as soaps and detergents as well as perfumes and cosmetics. They represented 14.9% of total EU27 chemical sales in 2019. Petrochemicals and specialty chemicals accounted for the majority – 51.9% – of EU27 chemical sales that year.
More than 2/3 of EU chemical sales generated in four EU Member States
EU27 chemical sales broken down by country (2019)
Germany and France are the two largest chemicals producers in Europe valued at €234.2 billion, followed by Italy and the Netherlands. These four countries accounted for 67.9% of EU27 chemical sales in 2019, valued at €368.9 billion. The share rises to 84.6%, or €459.2 billion, when including Spain, Belgium, and the Austria. The remaining 20 Member States of the EU accounted for 15.4% of EU27 chemical sales in 2019, with Poland and Sweden being the biggest among them.
UK chemical sales reached €34.1 billion in 2019. EU27 chemicals exports to the UK reached €24.4 billion, while imports from the UK totalled €20.9 billion. More than 61% of UK chemicals production is exported to the EU27 area.
EU chemicals sales reaches the second highest level since 2009
EU27 chemical sales structure (€ billion)
Total sales after the peak of 2018, sales in 2019 were the second highest since 2009. Total sales of the EU27 chemical sector cover three categories: EU27, intra-EU27 sales, home sales and EU27 foreign sales (or extra-EU27 exports).
Intra-EU27 sales extended 68% 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 EU chemical industry, increasing the number of chemical transport operations across EU borders. Intra-EU27 sales climbed from €169 in 2009 to €284 in 2019.
EU27 Home sales continued to lose ground: over the last ten years they lost about 20% 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 2009 to 2019, EU27 home sales decreased on average by 2.0% per annum; home sales went down from €100 billion in 2009 to €80 billion in 2019.
EU27 Foreign sales increased by nearly half of their value during the ten-Year period. The European chemical industry is an export-oriented industry, with 32.7% of its production being sold outside the EU. During the period 2009 to 2019, chemical exports outside the EU27 single market increased on average by 4.8% per annum. EU27 foreign sales in 2019 regained about 60% of their original value registered in 2009. The chemical industry must continue to be globally competitive to sustain its existing capacity and grow in line with global demand.
More than €177 billion is generated from selling chemicals outside the EU27 area
EU27 chemical sales structure (%)
EU27 Home Sales: In 2019, 15% 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 2019, intra-EU27 sales – excluding domestic receipts – accounted for 52% of total EU27 chemical sales, up from 45% in 2009. From 2009 to 2019, EU intra-EU27 sales increased on average by 5.3% per annum.
EU27 Foreign Sales: In 2019, 33% of chemical sales revenue was generated from selling in the non-EU27 chemical market (extra-EU27 exports), up from 29% in 2009. 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.