German Chemical Industry’s Record-breaking Recovery

Economic recovery and price increases driving turnover

Germany’s chemical industry is enjoying a record-breaking recovery from the Covid-19 crisis, with turnover topping the EUR 111 billion mark (up 12 percent on last year) for the first half of the year. In 2020, the sector recorded a six percent drop in sales as a result of the global coronavirus pandemic, but the VCI expects the industry to again exceed the EUR 200 billion turnover mark this year. The turnaround is due to several factors: growing business with China, the partial recovery of the American and European economies, and chemical price increases of almost five percent.

Resurgent industry production creating increased chemicals demand

The worldwide increase in industrial production also led to an almost six percent increase in production in the German chemical industry in the first half of the year. Demand for basic chemicals was "particularly dynamic," with polymers recording a production increase of 20 percent. Similarly, specialty chemicals recorded a production increase of almost nine percent

Global production bottlenecks creating shortages

Despite the upturn in global demand, global shortages in the supply of chemical precursors and supply chain disruption caused by the Covid-19 pandemic will continue to limit production capacity. However, Germany’s chemical industry will experience continued growth as it strives to meet existing excess demand. Almost one in five companies are currently at their production capacity limit, with national production capacity utilization of 86 percent significantly higher than normal. For 2021 as a whole, the VCI forecasts growth in both production volumes of 4.5 percent and turnover of 11 percent.