The German chemical industry is in a deep crisis. Production has slowed down and sales are declining. The industry is demanding competitive electricity prices and deregulation.
The German chemical industry further reduced its production in the second quarter for cost reasons. The hope for a recovery must be postponed in view of the increasing weakness in demand, explained the industry association VCI when presenting its economic report.
VCI President Markus Steilmann renewed the call for internationally competitive electricity prices and deregulation. “Of course we as an industry perceive that politicians are not closing their eyes to the current problems. But words are not the same as actions,” said Steilemann and complained about “immense locational disadvantages”.
What is now necessary is a bridge electricity price and the retention of peak compensation. “Time is running out.” Some companies have already announced permanent production shutdowns and the relocation of investments abroad, and others could follow.
VCI: “Chemical industry in deep crisis”
According to the VCI, the chemical industry is in a deep crisis. In the period from April to June, sales fell by 15 percent compared to the same quarter of the previous year, while production fell by 8 percent. Outside the important pharmaceutical division, production even fell by 14.2 percent. The facilities were only at 77.3 percent capacity. The aim is usually a value of around 85 percent.
According to the VCI, the tense economic situation is not yet noticeable, at least when it comes to the number of employees. The main contributing factor to this is the shortage of skilled workers. However, individual companies are already on the agenda for hiring freezes or short-time work in particularly affected areas.
Dark ones Future prospects for the second half of the year
According to the association, companies expect the business situation to deteriorate further in the second half of the year. The VCI has become more pessimistic for the year as a whole and now expects a production decline of 8 percent (previously minus 5 percent). If prices fall, annual sales are expected to fall by 14 percent.
Given the immense locational disadvantages, it is more than questionable whether and to what extent the industry will be able to benefit from a global upswing in the future. “The situation is serious and the mood is correspondingly bad,” explained association president Steilemann.