European chemicals under structural strain at end-2025

According to Cefic’s latest report on chemical industry trends in the fourth quarter of 2025, the sector’s competitiveness in Europe remains well below pre-crisis levels (the 2014-2019 average), driven by a combination of weak demand, global trade pressures and uncompetitive energy prices. This is particularly problematic for commodity products and petrochemicals, where China enjoys a competitive edge thanks to large-scale production capacity and low production costs.

Cefic notes that, compared with the United States, European gas prices were 2.5 times higher throughout 2025, leaving European producers at a sustained structural competitive disadvantage. Electricity prices also remain significantly higher than in the US, underscoring energy costs as a core global competitiveness challenge for the European chemical industry. Capacity utilisation in the EU chemicals sector remains at historic lows, well below the EU’s long-term average and, crucially, well below the US average. Weak demand and declining business confidence continue to weigh on the EU chemical industry.

The European Chemical Industry Council also highlights that the trade environment in which European chemical companies operate is exposed to high risks, due to the unprecedented global trade disruptions triggered by US tariffs. EU chemical export values to the US have been declining since March 2025. In 2025, the EU chemicals trade surplus was 7.3 billion euros below the 2024 level. Finally, the sector still records a trade surplus in value terms thanks to specialty and consumer chemicals but faces a deficit in volume terms.