Why does the VCI describe 2026 as a 'difficult' year for Germany's chemical industry?

The VCI describes 2026 as a 'difficult' year due to expected continued decline in German chemical production, heightened geopolitical risks—especially from the Middle East war—and the potential closure of the Strait of Hormuz, which is exacerbating supply chain disruptions and driving up prices for oil, gas, and naphtha; additionally, the industry faces persistent structural pressures including 'untamed bureaucracy, high costs, and global turbulence,' with no sustainable recovery anticipated in 2026 and margins remaining under pressure despite temporary demand spikes from precautionary orders.

What were the key performance indicators for Germany's chemical industry in Q1 2026, according to the VCI?

In Q1 2026, Germany’s chemical output (excluding pharmaceuticals) declined 4.3% year over year but rose 2% sequentially; plant capacity utilization increased to 75.1% from 72.5% in Q4 2025, though still below a profitable level; petrochemicals and derivatives output fell 8.9% YoY, polymers dropped 7.5%, cleaning and care chemicals declined 2.4%, fine and specialty chemicals fell 0.7%, and inorganic chemicals dipped 0.1%; producer prices overall rose 0.1% quarter on quarter but remained 1.4% lower YoY—with petchems down 5.5% YoY and polymers down 3.4%, while fine/specialty chemicals edged up 0.1%, cleaning/care chemicals rose 1%, and inorganic chemicals gained 2.4%; sales totaled €50.9 billion, down 5.8% YoY but up 2% sequentially, with all segments reporting YoY revenue declines: petchems (-11.6%), polymers (-9.4%), inorganic chemicals (-3%), fine/specialty chemicals (-1.2%), and cleaning/care chemicals (-0.4%).

VCI Expects 2026 to Be 'Difficult' Year; Chemical Output Forecast to Decline

Jun 1, 2026

The German Chemical Industry Association (VCI) forecasts declining chemical production in 2026 amid geopolitical risks and high costs. Q1 output fell 4.3% year-over-year as supply chain disruptions and rising energy prices pressured margins.

chemweek

VCI expects 2026 to be ‘difficult’ year; chemical output forecast to decline

chemweek

2026-06-01

VCI Expects 2026 to Be 'Difficult' Year; Chemical Output Forecast to Decline

2026-07-16

Germany’s chemical output to decline 1.5% in 2026 – VCI

2026-07-21

VCI Report: German Chemical Industry Faces Deep Troubles

VCI Expects 2026 to Be 'Difficult' Year; Chemical Output Forecast to Decline

FAQ