Chemical monitor

Selling prices in the chemical industry have shown little change recently, although prices for some intermediate products have risen, especially organic chemicals.

In March the index for selling prices went up by 0.1%, following a fall of 0.2%. But the underlying trend for prices is downward, and is 1.7% lower than a year ago. Prices of intermediate products rose by 0.2% in March against a fall of 0.9% in February, and organic products prices advanced by 0.3%. After having eased slightly in February, there was little change in pharmaceutical prices.

Input costs were stable in March, having fallen steadily at the start of the year. The chemical cost index showed a fall of 2.6% compared with a year ago, but with considerable variations.

Crude oil prices rose sharply in March by an average of 15% but have fallen back since. Other fuel costs fell 2.4% during the month. Imported product prices have been going up, with increases of 1.5% for imported metals and 0.4% for raw chemicals.

Pharmaceutical costs were unchanged in March, having been slightly firmer in February. Intermediate product costs were up by an average of 0.1%, led by higher costs for inorganics products.

In the short term, profit margins have shown little change, although competition has remained intense for certain products. However, over the longer term profitability has improved steadily as the gap between price changes and cost movements widened. And margins are expected to improve further over the medium term as trading activity in the chemical sector improves.