Survey, German Chemical Industry Hit by Rising Gas Prices

According to a survey, the chemical industry of Germany has been hit hard by increasing gas prices. According to the report, the Russia-Ukraine war has further exacerbated the tensed situation in the industry. The Business expectation has been dropped to minus 44.4 points in July 2022, compared to 11.8 points in same month in 2021.

Wolfgang Grosse Entrup, managing director of the chemical industry association (VCI), said, in Germany, the high energy prices are causing production to decrease, while pressure for import is increasing. In Germany, 44 percent energy consumption of the chemical industry is covered by natural gas, and about 30 percent if all chemical products require its use.

The gas prices in Europe are more than twice as high as before the beginning of the Russia-Ukraine war. The gas futures of European TTF were trading at around 190 euros per megawatt hour.

The biggest economy of Europe is relying heavily on the gas supplies from other countries. In 2021, 95 percent of the natural gas fed into the grid of Germany was imported. In the past, Russia was Germany’s one of the main suppliers of natural gas, and in May, 2022, crude oil and natural gas worth 1.9 billion euros were still imported to Germany from Russia.