Press release -

Germany’s Chemical Industry Hit Particularly Hard by Price Rise for Russian Gas

The business climate in Germany’s chemical industry deteriorated significantly in the past twelve months. Business expectations fell to a low of minus 44.4 points in July 2022, finds an ifo Institute survey. In the same month the previous year, the figure was plus 11.8 points. The war in Ukraine is further exacerbating the tense situation in the industry. “Natural gas accounts for 44 percent of energy consumption in the chemical industry. It also plays an important role in product manufacturing: around 30 percent of all chemical products require the use of natural gas,” says ifo industry expert Anna Wolf. 

Around half of Germany’s gas imports come from Russia. In addition, more than half the companies in the chemical industry complain about material shortages, which the companies expect to continue at least into the first half of 2023. 

Moreover, import prices for chemical precursors have also risen sharply. “In May 2022, import prices for other inorganic basic chemicals were already more than 65 percent higher than in the same month last year. For fertilizers and nitrogen compounds, they increased by a whopping 170 percent,” Wolf says.
 
Over that same period, exports of chemical products to Russia decreased by 49 percent and to Ukraine by 40 percent compared to the same month the previous year. “There’s no sign of an imminent turnaround in international trade with Russia. According to ifo surveys, 40 percent of the chemical companies that responded have suspended exports to Russia altogether, while 29 percent cannot foresee a continuation of export relations,” Wolf says.

Infographic, business development in the german chemical industry, july 2022
Infographic, business development in the german chemical industry, july 2022
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Dr. Anna Wolf

Dr. Anna Wolf

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Harald Schultz

Harald Schultz

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