Handelsblatt: expensive gas hits German chemical industry

Production, orders and turnover of the German chemical industry declined amid a sharp rise in the price of natural gas. The cost of fuel for the industry has tripled since the summer, and electricity prices have increased by 80%, Handelsblatt reports, citing the German Chemical Industry Association (VCI).

The situation in the German chemical industry contrasts sharply with the situation of manufacturers in the United States and Asia, where the growth of production remains. VCI chief executive Wolfgang Grosse Entrup said the industry’s recovery in Germany in the spring was over.

According to him, German enterprises again faced a reduction in production activity, the number of orders and revenue. At the same time, the cost of gas for industry in Germany is now about ten times higher than in the United States.

The most difficult situation was for medium-sized businesses. They account for 95% of the German chemical industry. Many such companies do not have long-term contracts to supply fuel and are forced to purchase gas in the spot market, where prices have increased significantly.

An additional factor of pressure was the rise in electricity prices. The recorded increase in tariffs increased the costs of producers by 80%.

The problems of the chemical industry are accompanied by a decrease in fuel reserves in Germany. According to the source material, on November 7, the level of occupancy of the country’s underground gas storage facilities fell below 60%.

Thus, the German chemical industry faced both rising energy costs and deteriorating production performance.