German chemicals assoc says recovery gains strength

FRANKFURT, Nov 3 (Reuters) - German chemicals trade group VCI said the sector's recovery, though tenuous, was gaining traction, driven by demand from Asia and Latin America.

"The (German) chemical industry continues on its way up, but production levels remain considerably below pre-crisis levels," said VCI Chairman Ulrich Lehner, the former chief executive of glues maker Henkel (HNKG_p.DE), in a statement.

VCI, which represents businesses in Europe's largest chemical producing country, reiterated a September outlook for sector revenue to slump 12 percent and for output volumes to drop 10 percent this year, the worst since 1975 when soaring costs from the oil crisis buffeted the sector.

Germany's chemical makers, which represent the country's fourth-largest industrial sector, sustained a slump in sales of 15 percent year-on-year in the third quarter but compared with the second quarter revenues rose 5.5 percent, VCI said.

"Industrial production in Asia has almost regained levels seen before the crisis. In addition, South American economies are on the upswing. That should buoy demand from abroad in the next few months," the association said.

Industrial production in Europe was emerging from a trough, it added. (Reporting by Ludwig Burger)