The German chemical industry is facing an impending collapse, driven by various factors, which could have significant impacts on jobs, production, and stock prices.
Dow Chemical Exits Germany
Dow Chemical has announced it will withdraw from Germany by the end of 2027, leading to the closure of several energy-intensive production facilities in Saxony (Böhlen) and Saxony-Anhalt (Schkopau). This decision directly affects about 550 jobs. The facilities are central to the supply of essential raw materials like ethylene and propylene, which are important for many downstream companies. Dow’s withdrawal represents a significant setback to the central German chemical triangle, which could result in higher logistics costs and a weakening of the regional economy.
Reasons for the Withdrawal
Exploding energy prices, overwhelming bureaucracy, and weakening demand from key industries are the main factors that have led to this drastic measure. Production rates are below last year’s levels, and the order books are only sparsely filled. The Association of the Chemical Industry describes the situation as dramatic.
At-Risk Jobs in the Ruhr Area
In the Ruhr area, around 15,000 jobs are at risk, particularly in the northern part with important locations such as the Marl Chemical Park (Evonik). Many facilities are operating at less than 75% capacity, and numerous companies are reporting losses. Local mayors are warning of a potential chain reaction.
Economic Impacts
These developments could lead to a systematic destruction of a once-strong industrial sector, potentially resulting in billions in losses for companies and triggering significant stock losses on the markets. Investors should be cautious in light of these structural problems, as losses of up to 30% or more appear realistic.