German chemical industry sees revenue rise amid Middle East conflict

The German chemical and pharmaceutical industry experienced a 7.3 percent increase in revenue during the second quarter, marking the first significant rise in three years. According to the industry association VCI, this growth was driven by a 2.4 percent increase in production and a 5.7 percent rise in prices. These factors are attributed to geopolitical tensions in the Middle East, which caused supply chain disruptions for competitors in Asia and the Middle East who rely more heavily on the Strait of Hormuz. Additionally, customers reportedly increased stockpiles due to the conflict involving Iran.

However, the VCI warns that this is a temporary reprieve rather than a trend reversal. Capacity utilization remains low at 73.2 percent, and orders began declining in June. The association has lowered its production forecast for the full year by 1.5 percent due to high cost pressures and a sluggish industrial economy.

In related industrial developments, BASF has inaugurated a modernized plant in Ludwigshafen for the production of acid chlorides and chloroformates. The low three-digit million-euro investment increases production capacity at the site by approximately 30 percent. The modernization also aims to improve sustainability, utilizing renewable electricity to reduce the product carbon footprint by an average of 19 percent.