Market evolution: Chemical preparations (CN 38249996) — 2015–2025

Introduction

This report examines the evolution of the European Union's external trade in chemical products and preparations classified under customs code 38249996 over the period from 2017 to 2025. The product category is a broad, residual one within Chapter 38, encompassing various chemical preparations not predominantly composed of organic compounds. Analysis of the available data reveals a period of significant transformation, characterized by a dramatic surge in imports, a consequent erosion of the EU's traditional trade surplus, and notable shifts in the geography of trade. The market also exhibited increased trade intensity and faced specific volatility shocks, particularly around 2022.

1. A Rapidly Shifting Trade Balance Fueled by Surging Imports

The most pronounced dynamic in the 2017–2025 period is the asymmetric growth between EU exports and imports, which fundamentally altered the region's trade position in this sector. While the EU remained a net exporter, its surplus shrank dramatically.

1.1. Export Growth Remained Positive but Modest

EU exports of chemical preparations grew steadily in value, rising from €2.42 billion in 2017 to €3.25 billion in 2025, a cumulative increase of 34.4%. This growth was supported by increasing volumes (up 16.6%) and unit values (up 15.3%). Key export destinations included the United Kingdom, the United States, and China, with exports to the latter growing at a relatively stable 18.2%.

1.2. Import Growth was Explosive, Led by a Korean Surge

In stark contrast, EU imports underwent a transformative expansion. Their value more than doubled, soaring by 137.6% from €1.00 billion to €2.37 billion. Volume growth was even more impressive, at 117.9%. This import boom was overwhelmingly driven by a single partner: the Republic of Korea. EU imports from Korea skyrocketed from €15.5 million in 2017 to €846.2 million in 2025, representing a staggering increase of over 5,350%. This single-country phenomenon accounts for the majority of the shift in the EU's trade dynamics.

1.3. The EU's Trade Surplus Eroded Sharply

The combined effect of moderate export growth and explosive import growth was a severe contraction of the EU's trade surplus. The surplus, measured in euros, fell by 37.7% over the period, dropping from €1.43 billion to €0.89 billion. At its lowest point, the net import reliance metric even turned slightly positive, indicating the EU briefly became a net importer on a value basis in some years. This marks a significant structural change from the start of the observed period.

2. Geographic Reorientation and Evolving Market Structure

Beyond the headline balance figures, the geographic focus of trade and the underlying production landscape within the EU also shifted meaningfully.

2.1. The Rise of New and Volatile Import Partners

While traditional partners like the United States and the United Kingdom remained important, their growth was modest compared to new dynamics. Türkiye emerged as another fast-growing import source, with trade value increasing by 822.7%. Data also points to high volatility in these trade flows; for instance, the coefficient of variation (CV) for imports from Türkiye was 0.82, indicating significant year-on-year fluctuations.

2.2. Internal EU Production Shows a Downward Trend

EU production data for the broader chemical product category (Prodcom 20.59.59.95, which maps to CN 38249996) reveals a contraction. Production quantity fell by 19.5%, and its value declined by 12.3%. This suggests that the surge in imports is not merely supplementing domestic demand but may be substituting for some EU production, or reflecting a structural shift in where certain chemical preparations are produced.

2.3. Intra-EU Specialisation is Highly Uneven

The capacity for exporting these chemical preparations is concentrated in a few Member States. Ireland, with a Revealed Symmetric Comparative Advantage (RSCA) of 0.84, is by far the most specialised exporter. Germany, despite a lower specialisation index, is the largest exporter in absolute value, shipping over €1 billion worth of these products outside the EU in 2025. Conversely, many smaller Member States show negative specialisation, indicating they are primarily importers or have negligible activity in this specific product category.

3. Increased Trade Integration, Concentration, and Market Shocks

The final section assesses the overall openness of the EU market for this product, the concentration of its trade partners, and the occurrence of disruptive events.

3.1. The EU Market Became More Trade-Intensive

Two key metrics show the EU's increasing integration into the global market for this product. The trade intensity (the share of trade in total apparent consumption) grew from 68.2% to 73.2%. Simultaneously, the export propensity (the share of production exported) also increased, rising from 53.4% to 61.1%. These parallel trends indicate that the EU chemical sector in this segment is deeply intertwined with international markets, both as a supplier and increasingly as a demand centre.

3.2. Import Partner Concentration Fluctuated, Then Rose

The concentration of EU imports, measured by the Herfindahl-Hirschman Index (HHI) on a value basis, was highly volatile. It spiked to a peak of 4,815 during the period of the Korean surge before moderating to end at 1,939 in 2025—still 12.4% higher than in 2017. This final level points to a moderately concentrated import market. In contrast, the export market remained more diffuse, with the HHI on volume actually falling by 19.0%, suggesting a broadening of export destinations.

3.3. A Pronounced Price and Volume Shock Occurred in 2022

The year 2022 stands out for major disruptions, likely linked to the energy crisis and supply chain adjustments. A significant price shock was detected in EU exports to China, with prices abnormally shifting by over 30%. More dramatically, EU imports from Korea experienced a massive price shock, with an abnormal shift of over 124%. Given that Korean imports constituted over half of all import value in some years, such volatility presents a clear supply chain risk.

Conclusion

Over the 2017–2025 period, the EU market for chemical preparations under code 38249996 underwent a structural transformation. The defining feature has been the explosive growth of imports from the Republic of Korea, which single-handedly drove a surge in total imports, sharply reduced the EU's trade surplus, and increased the concentration of its import market. This occurred alongside a contraction in domestic EU production volumes, suggesting a possible reallocation of supply chains.

The EU market has simultaneously become more open and trade-intensive, with rising export propensity indicating strong international competitiveness from producers in Member States like Germany and Ireland. However, this openness comes with vulnerabilities, as highlighted by the extreme volatility in the Korean import stream and the pronounced market shocks of 2022. The period ends with the EU still a net exporter but with a significantly diminished surplus and a heightened dependence on a geographically narrow and volatile set of external suppliers for this critical category of chemical products.