German chemical industry hit hard by soaring gas prices: IFO

BERLIN: Germany's chemical industry has been hit hard by rising gas prices,  a survey made by IFO Institute for Economic Research said.

The Russia-Ukraine war has "further aggravated the exacerbated the tense situation in the industry," according to a report released by IFO Institute for Economic Research said on

Monday. July business forecasts were -44.4, compared to 11.8 in July 2021, it said.

Europe's biggest economy relies heavily on gas supplies from other countries. In 2021, 95% of natural gas fed into Germany's grid was imported, the report said.

Wolfgang Grosse Entrup, managing director of Germany's chemical industry group VCI,  said  that high energy prices are reducing production and raising import pressure.  In Germany, natural gas covers 44% of the chemical industry's energy consumption and 30% of all chemical output, as per reports.

Since the Russia-Ukraine war began in late February, gas prices in Europe have doubled. Tuesday's European TTF gas futures were 195 euros per megawatt hour. Europe's largest economy relies on foreign gas. According to the Federal Statistical Office, 95% of Germany's natural gas was imported in 2021. (Destatis).

In the past, Russia was one of Germany's key natural gas suppliers; in May, Russia imported natural gas and crude oil worth 1.9 billion euros. End of July, Russia curtailed gas deliveries to Germany through Nord Stream 1 to 20%.

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