Despite an improvement in its first quarter, the chemical industry is pessimistic about the future. Bottlenecks in the supply chains and exploding energy and raw material costs are causing her problems.
The German Chemical Industry Association (VCI) did not make a forecast for the year as a whole in view of China’s zero-Covid strategy and the unforeseeable consequences of the war in Ukraine. The association had already withdrawn its original goals in March.
Nothing was left of the hoped-for upswing after the Corona winter. The prospects in the industry are becoming increasingly bleak due to rising energy and raw material costs, judged the President of the VCI, Evonik boss Christian Kullmann. A gas embargo or a halt to gas deliveries from Russia also had a devastating effect.
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In many companies in Germany’s third-largest branch of industry after the automotive industry and mechanical engineering, there is a mood of recession. Due to disrupted supply chains, industrial customers reduced their production and ordered fewer chemicals.
Chemical and pharmaceutical companies are finding it increasingly difficult to pass on higher costs to customers. At just under 81 percent, capacity utilization in the industry is already below the normal range. And the economic bottom has not yet been reached. It is unclear whether the prospects will improve again towards the end of the year.
According to the VCI, sales in the German chemical and pharmaceutical industry increased by more than 28 percent in the first quarter compared to the weak quarter of the previous year due to corona. This was mainly due to price increases of almost 22 percent. However, thanks to the pharmaceutical sector, production rose by 2.8 percent – without pharmaceuticals it would have fallen by 1.6 percent.
Evonik shares make a fresh start
Evonik shares have lost around 12 percent since the beginning of the year, but have recovered since the low in mid-March. Most recently, the share moved sideways between just under 24 and just under 26.50 euros. The recent down gap (see ellipsis) has almost closed again. The MACD (Momentum) is running sideways at the zero line and is therefore not generating any momentum at the moment. Only a breakout from the sideways range will give the stock a new boost.
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