Although the UK Chemical Industry’s production in 2004 increased significantly and exceeded the expected growth rate, the situation in the first half of this year was not optimistic. At present, the relevant agencies have lowered the expected growth rate. The British Chemical Industry Association (CIA) stated that the rapid rise in energy prices has had a significant impact on the competitiveness of the UK chemical industry.
According to the CIA, the chemical industry in the UK slowed down in the second half of 2004 and the first half of this year. The decline in chemical production in the first half of this year was mainly due to the downturn in the pharmaceutical industry due to imports of generic drugs; coatings and specialty chemicals also performed weakly. . The Oxford Economic Forecasting Center (OEF) has lowered the UK chemicals industry's output growth forecast twice. It is expected that chemical production will decline by 1.1% (including pharmaceuticals), and it is forecast to increase by 2.3% at the beginning of the year. Due to the weak performance of the UK pharmaceutical industry, it is expected that chemical production will decline slightly throughout the year.
The CIA pointed out that the rapid rise in energy prices has a greater impact on the chemical industry. The fixed-phase natural gas contract price of CIA member companies rose at least 70% compared with last fall. Because other EU countries still regulate the energy market, the UK natural gas industry users should pay more than 30% of the cost compared with other EU countries.
In addition, the continuous decline of natural gas reserves in the North Sea will make the shortage of natural gas in the UK a fatal problem. According to some chemical companies in the United Kingdom, natural gas prices may continue to rise this winter, which means that some chemical plants will have to stop work.
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