The growth of the chemical industry strongly depends on changes in the global economy. According to estimates of the American Chemical Council (ACC), the aggregate output of the chemical industry in Western Europe grew by 1.4%, while in Central and Eastern Europe it grew by 2.6%.
According to estimates of the International Monetary Fund (IMF), the global economy’s growth rate in 2014 did not change significantly year on year, and remained at approximately 3.3%. The economy is expected to accelerate in 2015-2016: the IMF forecasts the global GDP at 3.5% in 2015 and at 3.7% in 2016. In the coming years, a slight economic growth is also expected in Europe. According to the European Commission’s estimates of October 2014, the EU’s GDP growth in 2014 was 1.4%, i.e. similar to the previous year. Continued growth by approximately 1.5% is expected also in 2015 and 2016. According to estimates by the International Monetary Fund, the Polish economy is also expected to be on the recovery path, following the slowdown in 2013. In 2014, the GDP growth for Poland was estimated at approximately 3.2%, and it is expected to increase to ca. 3.5% in 2015 and 3.7% in 2016.
The growth of the chemical industry strongly depends on changes in the global economy. According to estimates of the American Chemical Council (ACC), the aggregate output of the chemical industry in Western Europe grew by 1.4%, while in Central and Eastern Europe it grew by 2.6%. American Chemical Council projects that in 2015-2019 the chemical industry’s production in Western Europe will be growing at 1.8-2.1%, and in Central and Eastern Europe the growth rate will be at 2.6-4.5%, with the global market’s CAGR of 3.5-4.0%. According to CEFIC, the estimated production growth in the EU chemical industry in 2015 will be approximately 1%. The sector’s growth in the region can be adversely affected by higher production costs and the growing competition on the global markets, including competitive pressures from Asian and American manufacturers.
Market opportunities
- Good prospects for the Polish economy.
- Stable albeit moderate growth prospects for the EU fertilizer market for the coming years: average annual consumption growth indicators until 2023 are as follows: 1.3% for nitrogen, 8% for phosphorous and 13.1% for potassium; moreover, for our part of the region these indicators are higher than for Western Europe and our cropped land ratio is 25% higher.
- A well-balanced agricultural policy of the European Union, based on supporting the agricultural sector through a system of direct and indirect subsidies, increases agricultural producers’ purchasing power; Poland is one of the policy’s major beneficiaries.
- Stable growth in consumption of liquid fertilizers, and especially liquid fertilizers individually composed for the needs of specific crops grown in specific areas.
- The policy currently pursued by Russia to limit exports of grains, that may to a certain extent halt the downward trend in their prices.
- Well-developing non-fertilizer segments of the fertilizer business, such as production of solutions for reduction of noxious gas emissions by the industrial and automotive sectors.
- Low prices of petrochemical feedstocks owing to low prices of crude oil.
- Rising new car registrations in Europe, including by about 6% annually in Germany.
- Upward correction of the 2015 GDP growth rate for the German economy.
Market threats
- Lingering economic slowdown in the European Union.
- EU’s imports of fertilizers from regions with access to cheaper feedstock.
- Growing global urea production capacities.
- New caprolactam and polyamide production capacities in China.