The German chemical and pharmaceutical industry rebounded in the third quarter, with output and sales rising 1.9 per cent and 2.8 per cent respectively, after being hit hard by the COVID-19 epidemic in the first half of the year, according to the German Chemical Industry Association (VCI). Producer prices also edged up 0.5% from the previous quarter, while the industry's workforce remained steady at about 464,000, but down from a year earlier.
German chemical production fell 1.7 per cent in the third quarter from a year earlier, but was up 4.9 per cent compared with the previous quarter, driven by increased demand. The VCI said average capacity utilization was rising, from 77.5 per cent to 81.6 per cent, so operating rates were almost back to normal in the third quarter. Chemical industry sales increased by 2.8% month-on-month, reaching 43.8 billion euros (about 51.6 billion US dollars). Sales to domestic and foreign customers increased by 3.5% and 2.5% respectively month-on-month. In particular, business with European customers was positively developed, but sales to foreign customers fell by 8% year-on-year, and overall sales fell by 7.5% year-on-year.
Falling oil prices and weak demand due to the COVID-19 outbreak led to a 2.6 per cent year-on-year fall in sales prices at German chemical companies in the third quarter, the VCI said. Crude oil prices are up about 36 percent, but down nearly 30 percent from a year ago. Naphtha prices are also up 50 per cent, but down 25 per cent year on year.
The global economic crisis is far from over, and optimism in the chemical industry has given way to worries about the future as the number of people infected in the second wave of the epidemic increases, the VCI said. Production in the chemical and pharmaceutical industry will fall by 3% in 2020. Germany's chemical-pharmaceutical industry will face difficulties in the fourth quarter. The COVID-19 outbreak will threaten the industry's recovery.