Europe Faces ‘Difficult Decade’ Against US, China, Port CEO Says

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(Bloomberg) — Europe’s car and chemical makers are at risk of losing competitiveness to China and the US as both industries face persistently high energy costs during the transition to cleaner fuels, according to the head of one of the continent’s leading ports.

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“We are in a dangerous situation,” Jacques Vandermeiren, CEO of Belgium’s Port of Antwerp-Bruges, said in an interview this week at the Salzburg Summit. “For the European industry, having the chemical industry suffering and seeing the Chinese electrical vehicles invading Europe is a double risk.”

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Europe, he said, “will have a very difficult decade.”

On Thursday, the European Central Bank made its ninth straight interest-rate increase, lifting by another quarter-point while keeping options open for the next meeting in September. 

Higher energy costs are weighing on the European chemical sector, which in turn is affecting shipping volumes. Earlier this month, Germany’s BASF SE joined other chemical makers in cutting its expectations for the year, blaming subdued global industrial output and slow demand for consumer products.

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Vandermeiren pointed to a “big slowing down,” with chemical production down 13% from January through April this year compared with the same period in 2022.

‘Shutting Down’

There’s a risk factories will close or relocate. 

“The next phase will be shutting down some plants,” he said. “The competitiveness of the chemical industry in Europe is really at stake.”

The shipping of cars, including electric vehicles, is the only sector that has recovered in recent months, propelled largely by exports from China.

But the influx of Chinese-made autos is slowing down, Vandermeiren said, because of a shortage of equipment needed to transport them — roll-on roll-off ships and the port terminals designed to handle the imports.

Chinese companies’ “big frustration is that they don’t have enough capacity in European ports,” he said. For that reason, “we see that they use now container vessels and containers to put cars in, which is of course not the ideal.”