EU Chemical Industry Shows ‘Fragile Improvement’ Amid High Costs

The EU27 chemical industry has shown signs of improvement during the first quarter of 2026, but the recovery remains ‘fragile’ due to weak demand, high energy costs, and global trade risks. According to the European chemical industry council Cefic, business confidence improved to around -9% in April from -19% in October 2025, while order-book assessments recovered to around -26%. However, demand remains weak and the sector has not yet entered a sustainable recovery phase. The industry continues to face a ‘deep and structural competitiveness challenge’, with performance remaining well below pre-crisis levels. Europe’s energy cost disadvantage is a key concern, with natural gas prices averaging around €42/MWh during January-April 2026, compared with roughly €13/MWh in the US. Chemical production fell 3.2% year-on-year in the first quarter, with declines particularly pronounced in ‘other organic basic chemicals’ and polymers. The recovery also remained ‘fragile and highly uneven’ across Europe, with France recording growth (+2.4%) while Germany (-4.3%), Italy (-7.7%), and the Netherlands (-9.4%) continued to post significant declines. Trade weakened during the first quarter, with exports down 12.4% year-on-year to €4.6 billion and imports down 15.7% to €4.8 billion. Without improvements in energy affordability, demand, and global trade conditions, the risk of a continued erosion of Europe’s chemical production base remains significant in the medium term.