March 13 (Reuters) - German chemicals lobby VCI said on Friday it expects potential persistent disruptions from the closure of the Hormuz strait to cause inflationary pressure and unsettle markets,
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Persistent Disruptions and Market Uncertainty
March 13 (Reuters) - German chemicals lobby VCI said on Friday it expects potential persistent disruptions from the closure of the Hormuz strait to cause inflationary pressure and unsettle markets, piling onto the difficulties the sector has experienced for years.
The association, which represents around 2,300 companies, did not provide an outlook for the industry in 2026, due to the U.S.-Israeli war on Iran, it added.
Challenges Facing the Chemicals Industry
Mounting Pressure from Costs and Tariffs
Germany's chemicals sector, the country's third-largest industry employing around half a million people, faces mounting pressure from high production costs, bureaucratic burdens and a stagnating economy, compounded by U.S. tariffs on imported goods.
Weak Industrial Activity and Price Competition
"Overall, the industry is suffering from weak industrial activity, high import pressure and intense price competition," VCI summarized in a statement.
Recent Performance and Outlook
Production and Revenue Trends
In the fourth quarter of 2025, the industry recorded a small rise in production of 1.9%, largely due to the pharmaceutical branch, while chemicals firms saw their production fall by 2.9% compared to the fourth quarter of 2024.
Revenue, however, fell by 2.8% compared to the fourth quarter of 2024, to 51.8 billion euros ($59.6 billion), led by a 3.0% drop in domestic sales.
Industry Leaders’ Statements
"The annual results for the chemical industry are abysmal – production, sales and prices are all in the red," VCI Managing Director Wolfgang Große Entrup said.
"2026 will not be any easier," he added.
Exchange Rate Information
($1 = 0.8697 euros)
Reporting Credits
(Reporting by Tristan Veyet in Gdansk; Editing by Joe Bavier)
