The ongoing conflict in Iran has severely affected the chemical industry in Germany, which is already facing challenges due to deindustrialization. As reported by Wolfgang Große Entrup, the managing director of the German Chemical Industry Association (VCI), companies are now in what he describes as 'absolute crisis mode.' The volatile situation has made price increases and product shortages a reality, with the industry struggling to cope amidst uncertainties. With no clear forecasts for the year ahead, the outlook remains bleak for many chemical enterprises.

The German chemical sector has experienced a concerning trend over the past few years, with average capacity utilization falling below sustainable levels. Since 2021, the number of orders has decreased by a quarter, and even 30% in the basic chemical segment, further exacerbating the industry's woes. The predictions of a turnaround appear grim, as the pressure from competitors and rising costs continue to mount due to the regional conflict. This situation is leading many companies to reevaluate their operations and strategize for a challenging economic landscape.

Experts warn that the ramifications of this crisis go beyond the immediate challenges faced by chemical companies. The implications could extend to supply chains across various industries, as essential chemicals become scarce and expensive. As the crisis unfolds, the industry, policymakers, and stakeholders will need to address the root causes and seek solutions to stabilize the situation and ensure a competitive future for Germany's key chemical sector.