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FRANKFURT (dpa-AFX) - The German chemical industry is warning of supply chain disruptions resulting from the war in Iran. The primary concern is the blockade of the Strait of Hormuz, which affects far more than just oil and gas supplies. "There are serious, growing concerns regarding supply bottlenecks for raw materials – for example, ammonia and phosphate, helium and sulfur," reported the German Chemical Industry Association (VCI) in Frankfurt. Initial signs of disruptions in international supply chains have already emerged.
Fertilizers Impacted
The blockade of the Strait of Hormuz particularly affects fertilizers, as 20 percent of the global trade in ammonia is shipped from the Middle East through the strait, said Director General Wolfgang Große Entrup. For sulfur, 50 percent of maritime trade passes through the Strait of Hormuz. Sulfuric acid is essential for products such as fertilizers and chemicals. "In the case of helium, the chip industry is already significantly concerned because 40 percent of the world's helium comes from Qatar," he said. "This affects the electronics industry, semiconductor manufacturing, and aerospace engineering."
The longer the war lasts, the more severe the consequences will be. High prices and persistent uncertainty are pushing many companies to their limits, Große Entrup stated. "Strategic planning is becoming increasingly impossible. Instead, companies are operating on a short-term, day-to-day basis."
War Exacerbates the Situation
The war in Iran is clouding the outlook for a chemical industry that has been struggling for years with high energy prices, global overcapacity, and a weak economy. The VCI has withdrawn its forecast for 2026. Most recently, it had expected stagnant production in the chemical and pharmaceutical industries, with a one percent decline for chemicals alone. Over the past four years, approximately ten percent of chemical production capacity in Europe has already been decommissioned, Große Entrup noted.
Many chemical corporations have launched austerity programs in response to the crisis. Industry leader BASF, for instance, is cutting thousands of jobs: around 4,800 employees will have left the group between the end of 2023 and the end of 2025.
In 2025, the chemical and pharmaceutical sector, which employs 478,000 people, suffered from weak demand and cheap competition from China. Revenue fell by 1.4 percent to 219.6 billion euros. In the cyclically sensitive chemical sector, production dropped by 3.3 percent, while the pharmaceutical sector saw an increase of 4.5 percent.
IG BCE Warns of Industrial Erosion
The IG BCE trade union is warning of a "clearcutting" of the German chemical industry due to overcapacity. There is a risk of "uncontrolled capacity reduction" in basic chemical production, said IG BCE Chairman Michael Vassiliadis. This threatens the loss of entire industrial clusters.
According to the union, many basic material manufacturers are considering plant closures because global overcapacity for basic chemicals has reached an estimated 20 percent. In the chemical industry, where basic chemicals serve as raw materials for downstream products such as plastics, medicines, and dyes, this is creating significant price pressure. Vassiliadis appealed to Chancellor Friedrich Merz (CDU) to take action in support of the industry./mne/als/DP/mis
