High energy prices cause German chemical and pharmaceutical companies to cut production
Release Time:
2022-09-19
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Germany relies heavily on Russia for natural gas. Since the outbreak of the Russia-Ukraine conflict, the EU has followed the United States in imposing multiple rounds of sanctions on Russia, and Germany's natural gas supply from Russia has plummeted. Affected by this, many German chemical and pharmaceutical companies had to reduce production. On the 14th local time, the German Chemical Industry Association said that the production of chemical products in Germany may fall by 8.5% this year.
The chemical and pharmaceutical industry is the third pillar industry in Germany. According to the German Chemical Industry Association, due to the need to use natural gas as fuel or raw material in the production of products such as plastics, pharmaceuticals and fertilizers, the chemical and pharmaceutical industries are among the largest natural gas consuming industries in Germany, accounting for 15% of all available natural gas in the country. %. At present, the industry is particularly hard hit by the energy crisis. In the second quarter of this year, production in the German chemical and pharmaceutical industry fell by 6.4% compared to the previous quarter. Kuhlmann, director of the German Chemical Industry Association, said that the production reduction is only the first step. If some links are forced to be completely disconnected, many chemical and pharmaceutical companies in Germany may also be at risk of suspending production.
At the same time, Germany has recently significantly increased its imports of chemical products to make up for the reduction in domestic production. According to data from the German Federal Statistics Office, the number of imported inorganic chemicals in Germany in the first half of 2022 increased by about 40% year-on-year. Germany's BASF said earlier that the company has begun to buy some chemical raw materials from abroad instead of producing in Germany, in order to reduce natural gas consumption at its German plants. Germany's Evonik Industries Group said that energy prices have brought a heavy burden to many German companies participating in international competition.
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