German chemicals lobby VCI sees higher 2026 sales, says Iran war masks industry troubles

LANXESS AG

03/09/2026 07:30

By Anastasiia Kozlova
Sept 3 (Reuters) - German chemicals lobby VCI said on Thursday it expected industry sales to grow this year, but warned the recent improvement in business conditions was merely a "breather" linked to the Middle East conflict rather than a sustained recovery.
The association now expects 2026 sales to rise 2.5%, supported mainly by higher producer prices, even as weak capacity utilisation, cost pressures and subdued industrial demand will likely continue to weigh on the sector in the second half of the year, it said.
Germany's chemical and pharmaceutical industry reported a 7.6% year-on-year rise in second-quarter sales, driven largely by customers stockpiling inventories amid the Middle East conflict.
The war has also disrupted supply chains for some competitors in Asia and the Middle East, which benefits certain manufacturers in Germany and elsewhere in Europe, VCI said.
"The old problems have not vanished into thin air," VCI President Markus Steilemann said in a press release, adding that the gain in production and revenue was encouraging, but misleading.
"The German industry finally needs a consistent strategy to boost competitiveness. If nothing is done, this delicate recovery will quickly turn into disillusionment again."
The third-largest industry in Europe's powerhouse Germany can be seen as a bellwether for the broader region's economy, as it produces material components used across sectors ranging from automotive and construction to agriculture and textiles.

(Reporting by Anastasiia Kozlova in Gdansk, editing by Milla Nissi-Prussak)
((Anastasiia.Kozlova@thomsonreuters.com;))