Chemical Monitor

Input costs in the chemical industry fluctuated in recent months but have been more stable lately. Crude prices dropped significantly but this was counterbalanced by some increases in costs for imported raw materials.

In June the index for production costs showed little change after rising by 0.1% in May. Moreover, total costs in the chemical sector fell by 2.2% on an annual basis.

Cost movements have shown significant variation, with crude oil falling by 6.7% in June and other fuels dropping by 0.8%. However, imported metals went up by 1.4% in this period while imported chemicals advanced by 1.2%.

Pharmaceutical costs rose marginally by 0.1% in June having been steady the previous month, while over the year, they fell by 0.9%. Intermediate products recorded a drop in costs of 0.1% in June and 0.8% over the longer term.

Selling prices continued to move ahead, increasing by 0.2% in June following a rise of 0.3% in May. However, the price index was down by 1.2% compared with the corresponding period in the previous year.

Pharmaceutical prices remained unchanged in the short-term but went up by 0.4% compared with 2001; intermediate product prices rose by 0.2% in June, but decreased by 1% over the longer term.

In the short term, profit margins in the chemical industry will continue to improve steadily. However, the longer term prospects for profitability remain uncertain, in view of the possibility of higher costs being incurred by leading chemical companies.