Chemical Monitor

Production costs in the chemical industry, which have been variable in recent months, were steady in October. Some raw material costs were static, while others, notably oil prices, were easier. In October, the index for chemical costs was unchanged, having risen by 0.1% the previous month. Over the longer term, this index was slightly lower, falling by 0.3% on an annual basis.

Production costs for pharmaceuticals were stable in October and showed a drop of 0.2% compared with the previous year. Intermediate costs rose by an average of 0.2%, led by an above-average rise for organic products; they were also slightly higher on an annual basis.

A major factor has been the drop in crude oil prices. They have been rising for some time but in October they declined by 1.2%. However, compared with a year ago, oil prices were still up by 27%, partly due to worries about an imminent war in the Middle East. Imported raw chemicals prices, on the other hand, were hardly changed and showed an increase of only 0.1%.

Chemical prices hardly changed and were up by less than 0.1% in October, although they were 0.8% higher than the corresponding period in the previous year. Pharmaceutical prices were unchanged, but intermediates prices increased by an average of 0.4%. This compared with a rise of 0.1% in September and an increase of 2.5% on an annual basis.

Costs and prices in the chemical sector are expected to remain fairly subdued for the time being. However, this situation could change should a war take place in the Middle East and chemical firms should remain vigilant with regard to their cost structure in the coming months.