By Ozan Ergenay March 19 (Reuters) - Lanxess said it was raising chemical prices to counter the effects of the Middle East conflict, after the speciality chemicals maker reported annual results and
Lanxess Increases Chemical Prices Due to Iran War and Rising Energy Costs
Lanxess Responds to Middle East Conflict and Energy Price Surge
By Ozan Ergenay
March 19 (Reuters) - Lanxess said it was raising chemical prices to counter the effects of the Middle East conflict, after the speciality chemicals maker reported annual results and announced job cuts earlier on Thursday.
Impact of the U.S.-Israeli War on Iran
The U.S.-Israeli war on Iran, continuing into its third week, has pushed up prices in the chemicals sector and disrupted markets, sparking fears that the widening conflict will create an oil price shock, raise inflation and dampen consumer demand.
Chemical companies have been hit particularly hard, as many raw materials for the industry are produced in the Middle East.
Rising Energy and Material Costs
Lanxess CEO Matthias Zachert told reporters that the prices the company pays for energy and materials had been going up since the war started.
"We have to do something about it and pass on these price increases, so that we do not have to foot the bill," Zachert said.
"If you have a look at the situation, our competitors are doing the same thing, but we started early in order to counteract as early as possible."
Industry-Wide Price Increases
Some other chemicals companies, including Brenntag , Wacker Chemie and BASF , have also started raising prices due to surging energy costs.
If the Middle East conflict continues, the chemical industry will see a further and lasting increase in product prices, Zachert said.
Global Economic Risks and Industry Outlook
In a separate statement on Thursday, German chemicals association VCI said the war significantly increased the risks to the global economy, particularly due to the blockade of the Strait of Hormuz.
"Consequently, strong price increases are expected, especially for products where the region plays a central role in the global trade," the industry lobby said.
(Reporting by Ozan Ergenay in Gdansk, editing by Milla Nissi-Prussak)
