German chemicals lobby lifts 2026 sales forecast but sees no firm recovery

what happened

The VCI industry association, which represents around 2,000 chemical and pharmaceutical companies, per Reuters, raised its 2026 sector turnover growth forecast to 3.5% from 2.5% in September. The increase, it said, will come entirely from higher producer prices rather than stronger production volumes.

The association views the temporary gains from supply disruptions linked to the Iran war as over. European producers benefited unexpectedly because disruptions hit Asian rivals harder, while passing higher energy costs on to customers lifted some chemical prices. VCI managing director Wolfgang Grosse Entrup said: "We anticipated that these windfall gains stemming from specific geopolitical circumstances would eventually come to an end, and that is precisely what has happened."

Third-quarter revenue rose 5.8% from a year earlier to 53 billion euros, but fell 2.7% from the second quarter. Production volumes dropped 3.5% on the year, while capacity utilisation rose to 76.6%, mainly reflecting plant closures and capacity cuts.

why it matters

For markets, the key point is that revenue growth rests on prices rather than demand, and profits at large chemical groups are largely earned outside Germany. VCI also urged Berlin to tackle energy costs and bureaucracy before state elections next spring.

market impact

European chemicals and German industry: price-driven growth without demand recovery keeps pressure on the sector

instruments

on polymarket