Chemical industry activity recedes in the first quarter, says Abiquim

Production, domestic sales and demand for industrial chemicals followed in trajectory of decline in the first quarter of this year, according to the Brazilian chemical industry Association (Abiquim). The production fell 0.93 percent in the first three months of the year, compared with the same period in 2015, while domestic sales declined 6.69%, on the same basis of comparison. In turn, the Apparent National Consumption (CAN), an indicator of demand, had retracting 5.5% in the first three months of the year, compared with the months of the previous year. Imports also showed negative results, with indentation of 2.07% over the same period. If deleted the Group products to intermediaries, fertilizers imports present indentation of 13.62%. According to the Abiquim, the only variable positive in terms of volume in these first three months is the development of foreign sales, which climbed 46.3% as compared to the same period last year. Fall in occupancy rate the occupancy rate of the installed capacity of the chemical industry in Brazil stood at 76%, on average for the first three months of this year, three points below that recorded in the same period in 2015. Whereas the chemical industry production standards worldwide, the ideal would be that the plants were operating between 87% and 90%. In examining the Director of Economics and statistics of Abiquim, Fatima Giovanna Coviello Ferreira, the low capacity utilisation since 2008 may mean, in the medium and long term, discouraging new investments. For the Director of Abiquim, the most expressive of the retraction of demand is associated with contraction of the national economic activity. "Important chains of chemical industry clients have reduced their operations. Production and imports falling simultaneously concern, as may also be going on replacing the chemical demand for finished imported products. It hasn''t been easy keeping the operational activity with the worsening political and economic scenario of the country, "says Fatima Giovanna. The Director of Economics and statistics CITES concern with the maintenance of the worsening of internal activity, closing businesses, the high level of interest and with negative projections for GDP, with consequent high unemployment. Long term despite the difficult moment, the Economist points out that you can''t help but think in the long run, being that it is important to keep the focus on structural issues. In its evaluation, the points of greatest attention refer to settling the question of basic raw materials, with the adoption of a policy for the use of natural gas as raw material, the total use of gas liquids for lifting the availability of raw materials for the industry, an energy tariff more attractive for industrial production and logistical barriers and solution infrastructure. As for exports, which have been the outlet for maintenance of chemical production, Abiquim argues that the Government raise the rate of Returned to the maximum provided for by law in the short term and to evaluate the possibility of including, reviewing the fees to more realistic levels