However, Germany is also home to Europe's largest chemicals sector which churns out plastics, paints, acids and other key inputs that are critical to manufacturers and heavy industries that form the backbone of the German economy. Sharply lower business activity also caused a drop in chemicals consumption last year, but as economic activity recovered in 2023 a lingering shortage of key chemical products has pushed German chemicals prices to near record premiums over those supplied by other producers. DAMAGE DONEThe sustained high prices of German chemical products over international rivals have two important damaging consequences. If the German chemicals sector is to ensure its own long-term future, it must somehow win back any business lost among commodity manufacturers by driving product prices steadily lower relative to rival offerings. On its own, the chemicals sector may struggle to both cut costs and clean up its own product lines and emissions footprints.

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Persons: Gavin Maguire, Christopher Cushing Organizations: German Chemicals Association, Reuters, Thomson Locations: LITTLETON , Colorado, Germany, Europe, South East Asia, Polymerupdate, United States