German chemicals assoc sees slight recovery in H2

FRANKFURT, July 8 (Reuters) - German chemicals trade group VCI still expects the worst full-year drop in production output in more than 30 years in 2009 but said the beginning of a recovery was imminent in the second half.

VCI, which represents companies in Europe's largest chemical producing country, on Wednesday reiterated a May outlook for sector sales to slump 12 percent and for production output to drop 10 percent, the worse since 1975, when soaring costs from the oil crisis buffeted the sector.

"We see a glimmer of light amid dark clouds," VCI Chairman Ulrich Lehner said in a statement.

"Production has stabilised over recent months, even though at a very low level."

Most VCI members were expecting demand to pick up slightly in the second half, the trade group said, confirming a similar assessment it gave in May.

Chemical makers, which represent Germany's fourth-largest industry sector, saw sales slump 16.5 percent in the first half, while production output dropped 15.5 percent, VCI added. (Reporting by Ludwig Burger)