Sales increase The chemical industry is raging

As of: 06/09/2021 3:54 p.m.

The third largest German branch of industry has reached the pre-crisis level again. After growth in the first quarter, the chemical industry raised its forecast for the year. The pharmaceutical business in particular is doing better than expected. Despite the rise in raw material prices and delivery problems, the German chemical industry continued on its growth path in the first three months of the year. As announced by the German Chemical Industry Association (VCI), the sector increased its sales by 1.1 percent to 51.3 billion euros compared to the same period in the previous year. Production increased by 0.8 percent. Compared to the fourth quarter of 2020, sales growth was even 3.6 percent.

Again above pre-crisis levels

With the sustained upward trend, the third largest German industrial sector – after the car and machine builders – has already compensated for the corona dent. Production and sales are now back above pre-crisis levels. Above all, exports to EU countries increased. In addition, there was the increasing demand from Asia. The chemical industry was also able to grow in the German home market – thanks to higher prices.

“Hope for a good year in chemistry”

VCI President Christian Kullmann, who is also the head of the chemical company Evonik, was delighted with the development. “The first few months give hope for a good year in chemistry,” he said. “The demand for chemicals and pharmaceuticals is increasing.” The industry association is now even more optimistic about the year as a whole. For 2021, the VCI predicts sales growth of eight percent and an increase in production of 4.5 percent. So far, a plus of five percent in sales and an increase of three percent in production had been forecast.

“The demand for chemicals and pharmaceuticals is increasing.” – VCI President Christian Kullmann Image: picture alliance / dpa

Price increases and corona vaccines as drivers

Strong price increases for the chemical and pharmaceutical products manufactured should make a significant contribution to this. The association is anticipating 3.5 percent higher prices for the year as a whole. The chemical industry is also benefiting from the corona vaccine boom. There are numerous suppliers for the vaccines from BioNTech, Moderna & Co, including Evonik and Wacker Chemie. You act as a technology supplier or as a contract manufacturer.

Worry about delivery bottlenecks

Only supply bottlenecks for materials and intermediate products are dampening the good mood in the chemical industry. “They are now affecting the operational processes of every second company,” warned VCI President Kullmann. However, the situation should ease again in the course of the year. In March, the blockade of the Suez Canal interrupted the supply chain from Asia in the chemical industry. Around 16 percent of chemical imports and 18 percent of exports take this route.

Huge green electricity demand for climate neutrality

In addition, the more stringent climate protection targets are making the industry difficult. “The way there remains in the fog”, said recently Wolfgang Große Entrup, General Manager of the VCI. “For the new goal, our industry needs more electricity than Germany currently consumes overall – as green electricity.” If the industry does not get competitive prices for electricity from renewable energies, it will not manage the energy transition. In spring 2020, the association presented a study in which it considers climate neutrality by 2050 to be technically feasible. For this, however, enormous additional amounts of green electricity are required. By the mid-2030s, the chemical industry’s electricity needs will increase more than tenfold. In addition, the electricity price would have to drop to four cents per kilowatt hour, demanded the VCI. The industry currently pays between eight and ten cents per kilowatt hour.

BASF is pushing ahead

VCI President Kullmann considers the renewed tightening of climate protection targets and the more rapid increase in CO2 prices called for by the Greens in their election manifesto as “irresponsible”. At the annual chemistry conference of the “Handelsblatt”, he warned that those who shackle the industry put the ax to their transformation. Good politics are based on incentives and not on bans. BASF is one of the first chemical companies to commit to reducing greenhouse gas emissions to zero on a fixed date. The people of Ludwigshafen want to become climate neutral by 2050. Among other things, one should help huge wind farm in the North Sea that BASF is planning together with RWE . The plant with a capacity of two gigawatts is to supply the Ludwigshafen chemical site with green electricity from 2030.

VIC supported the market again, the VN-Index only lost more than 8 points although the red color covered three-quarters of stocks on the HoSE

VN-Index on April 16 was like going on a roller coaster when sometimes “hitting a hammock” decreased by 20 points compared to the beginning of the session. However, this index then quickly recovered, ending at 1,238.71 points, down 8.54 points, or 0.68%.

Although it only dropped by more than 8 points, if looking at the general picture on HoSE, the situation is much more tragic. There were 355 losers on the floor, equivalent to 3/4 of the stocks on the floor. The number of advancers was only 81, while the number of unchanged stocks was 36.

This session, VIC supported the market again, similar to many sessions in the past. VIC’s biggest “ally” during the session was also a real estate stock: NVL.

In fact, NVL is the most impressive stock in the market recently when it recorded 12 consecutive gaining sessions, dragging the stock price up from 79,500 VND / share to 108,000 VND / share, or up to 36. %. Particularly in the session of April 16, the market price of this stock increased by 5.37%.

Not only VIC and NVL, BCM also impressed with a ceiling gain. Meanwhile, PDR surged 5.03%. These are the 4 stocks that have the most positive influence on the index, as well as 4 real estate stocks. In addition, FLC and ROS also participated in the top 10 stocks that positively affected the index.

The remaining real estate stocks are generally less positive.

For the banking group, the overall situation was tragic. Except for SSB, EIB and LPB, the remaining stocks all fell quite sharply, most of them lost about 1-3% in value.

Securities group was even more miserable when the red color covered. SSI down 2.44%, VCI down 1.83%, HCM down 3.03%, AGR down 3.69%, TVS down 2.97% …

For manufacturing groups, the green color was light in HPG and MSN with a slight increase, respectively 0.18% and 0.1%, the rest fell mostly, of which VNM plunged 2.22%, SAB fell. 1.51% while GVR decreased to 4.32%.

The situation is also not so good for aerospace and energy stocks. VJC and HVN decreased by 2.05% and 1.9% respectively. GAS stood still at reference price, POW decreased by 1.49% while PLX increased 2.94%.

The matched liquidity on the HoSE was at a very high level, up to over 20,000 billion VND.