Germany’s chemicals to suffer longest impact from supply bottlenecks – Ifo

LONDON (ICIS)–The chemicals industry in Germany could suffer the longest impact from supply chain bottlenecks, research institute Ifo said on Wednesday.

Shortages in the chemicals sector are expected to continue affecting production for nearly 10 months, compared to the average eight-month backlog for overall manufacturing.

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Bottlenecks in October have eased somewhat, but are only marginally down on the previous month, with 70.4% of companies reporting problems with supply of intermediate products and raw materials.

“It would be wrong to describe this as an easing. Especially because companies expect the shortages to persist well into the new year,” said Ifo’s head of surveys, Klaus Wohlrabe.

Markets downstream of the chemicals sector including the automotive industry and manufacturers of electrical equipment marked the most prominent shortage.

The German chemicals industry is the largest in Europe; in 2020, it posted sales – including pharmaceuticals – of €190bn.

The petrochemicals-intensive automotive sector is a key end market for chemicals, which sells around 20% of its output to car manufacturers.

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Although the situation eased in most other sectors, producers were still planning to raise prices in response to the supply increases.

Front page picture: Containers stacked in Munich
Source: Matthias Schrader/AP/Shutterstock