German chemicals to recover sooner than other manufacturing sectors

Author: Morgan Condon

2020/08/13

LONDON (ICIS)--The German chemicals industry is expected to return to normal within a year and before other manufacturing sectors, according to data from analysts at the ifo Institute on Thursday.

In response to the latest ifo Business Survey, those active in the chemicals industry anticipated a return to normal in eight months and was one of the better performing segments of the manufacturing industry.

As a whole, manufacturing is expected to return to pre-pandemic levels in 10.1 months, marking a sharper recovery than other sectors.

Companies across Germany anticipate normal business to pick up in 11.0 months, with the services industry marking the slowest return to previously expected levels.

“The road to normalcy is still very long for many companies. Even once all public restrictions are lifted, companies will still have to deal with their consequences,” said ifo researcher Klaus Wohlrabe.

The drag on the services sector may cap demand for some products such as polyethylene terephthalate (PET) – as the opportunity to sell soft drinks at big events will be significantly less.

Other segments of manufacturing will likely have different push and pull factors on fundamentals in the chemicals industry.

Textile manufacturing is not expected to return to normal for 14.5 months, which could erode margins for products used as fibre intermediates.

The most elastic recovery according to the survey was for the manufacturing of computers, which tips a 6.8-month return to previous levels.

This could support demand for a range of materials such as acrylonitrile-butadiene-styrene (ABS), polycarbonate (PC) and polymethyl methacrylate (PMMA).

Front page picture: Facilities run by Bayer in Krefeld-Uerdingen, Germany
Source: Karl F Schofmann/Imagebroker/Shutterstock 

Clarification: Re-casts headline