German Chemical Growth Slows in Q3

19.11.2021 - Germany’s chemical and pharmaceutical industry continued on an upward curve in the 2021 third quarter, though growth tapered off, the industry association Verband der Chemischen Industrie (VCI) said in its quarterly report. Progress was hampered in part by tightening raw material supply, strained logistics and rising energy prices. Looking ahead, the association said, is for a “further cooling” of the sector’s business is on the horizon.

In the three-month tally, overall sales improved by 6.3% year-on-year to €55.3 billion as producers’ selling prices added 2.9%.  Production increased by 0.8%, thanks mainly to “positive development” in pharmaceuticals, where vaccines were in strong demand.

Third-quarter demand in the main was buoyed by industrial customers, in particular from outside the home market, seeking to fill the gap in the increasingly porous supply chains. Not all orders could be filled, however. Capacity utilization rates, at 82.3% on average, fell to the lower end of the usual range.

VCI president Christian Kullmann, who is also CEO of Evonik, said producers do not expect any near-term improvement, either in terms of supply or energy costs, and additional pressure on sales and earnings could be seen this winter. The association has appealed to the German federal government to take action to brake the increasingly volatile upward momentum in energy prices.

For full year 2021, VCI is forecasting a 4.5% rise in production of chemicals and pharmaceuticals combined. Selling prices can be expected to come in around 8.5% higher, and sales revenue for all four quarters should settle 15.5% higher at € 220 million, the association said.

Author: Dede Williams, Freelance Journalist