Chemical Industry Radar · August 2026 · V3
The rebound that ran through Hormuz
August produced the strongest sentiment jump in four years. It did not produce a German chemical recovery.
The rebound passed the orders and earnings tests; it failed utilisation, energy and investment.
Utilisation73.2%vs 80.4% long-run
Power€126.85/MWh · +20.3% MoM
A supply shock wearing the clothes of recovery.
Asian supply failures linked to the blockade of the Strait of Hormuz redirected demand and pricing power toward European producers. Installed German capacity became useful because competing capacity became unavailable.
August produced the strongest improvement in German chemical-industry sentiment in four years. It did not produce a German chemical recovery.
The test is conversion: whether orders enter production, utilisation, hiring and domestic growth investment after supply elsewhere normalises.
- 01 · DisruptionAsian supply failedHormuz constrained competing output.
- 02 · SubstitutionOrders moved westEuropean installed capacity regained pricing power.
- 03 · CaptureEarnings reactedCompany guidance improved before volumes did.
- 04 · TestFactories must followOutput, utilisation and investment remain decisive.
Sentiment snapped back; expectations still ended below zero
ifo balance points · July and August 2026
- business climate, July: −26.3 points. Before the August supply-substitution shock.
- business climate, August: −2.4 points. +23.9 points from July.
- current situation, July: −14.6 points. Before the August supply-substitution shock.
- current situation, August: +11.6 points. +26.2 points from July.
- expectations, July: −37.2 points. Before the August supply-substitution shock.
- expectations, August: −15.5 points. +21.7 points from July.
- export expectations, July: −22.7 points. Before the August supply-substitution shock.
- export expectations, August: +10.1 points. +32.8 points from July.
Inspect exact values
| Indicator | July | August | Change |
|---|---|---|---|
| business climate | −26.3 | −2.4 | +23.9 pts |
| current situation | −14.6 | +11.6 | +26.2 pts |
| expectations | −37.2 | −15.5 | +21.7 pts |
| export expectations | −22.7 | +10.1 | +32.8 pts |
The index recovered from May, but remains below neutral
Published Mood Index · October 2025 to August 2026
- 2025-10: 3.0 / 10. legacy published index; no smoothing or backfill.
- 2025-11: 2.5 / 10. legacy published index; no smoothing or backfill.
- 2025-12: 2.3 / 10. legacy published index; no smoothing or backfill.
- 2026-01: 2.8 / 10. legacy published index; no smoothing or backfill.
- 2026-02: 3.1 / 10. legacy published index; no smoothing or backfill.
- 2026-03: 1.8 / 10. legacy published index; no smoothing or backfill.
- 2026-04: 1.7 / 10. legacy published index; no smoothing or backfill.
- 2026-05: 1.6 / 10. legacy published index; no smoothing or backfill.
- 2026-06: 2.6 / 10. legacy published index; no smoothing or backfill.
- 2026-07: 3.2 / 10. 2.0 published index; no smoothing or backfill.
- 2026-08: 3.4 / 10. 3.0 published index; no smoothing or backfill.
Inspect exact values
| Month | Index | Version |
|---|---|---|
| 2025-10 | 3.0 | legacy |
| 2025-11 | 2.5 | legacy |
| 2025-12 | 2.3 | legacy |
| 2026-01 | 2.8 | legacy |
| 2026-02 | 3.1 | legacy |
| 2026-03 | 1.8 | legacy |
| 2026-04 | 1.7 | legacy |
| 2026-05 | 1.6 | legacy |
| 2026-06 | 2.6 | legacy |
| 2026-07 | 3.2 | 2.0 |
| 2026-08 | 3.4 | 3.0 |
The conversion gap remains open.
orders+3.7% YTD+6.2% y/y · −2.7% m/m
production−2.7% YTD+0.1% y/y · −1.8% m/m
sales+1.5% YTD+9.8% y/y · −1.9% m/m
The headline moved little. The system rotated hard.
Orders and earnings gained weight. Energy took much of it back. Investment stayed pinned near the floor.
Orders and earnings improved; energy gave much of it back
Component score, 0–10 · July versus August
Inspect exact values
| Component | Weight | July | August | Delta | Confidence |
|---|---|---|---|---|---|
| Production & utilisation | 15% | 2.5 | 2.5 | 0.0 | 95% |
| Orders & demand | 10% | 4.0 | 5.5 | +1.5 | 90% |
| Profitability & revisions | 10% | 6.0 | 7.0 | +1.0 | 90% |
| Energy & feedstocks | 15% | 2.5 | 1.5 | −1.0 | 92% |
| Investment & Standort | 15% | 1.5 | 1.5 | 0.0 | 68% |
| Employment & productivity | 10% | 2.5 | 3.0 | +0.5 | 80% |
| Trade & competitiveness | 10% | 3.0 | 3.5 | +0.5 | 95% |
| Innovation | 5% | 4.5 | 5.0 | +0.5 | 72% |
| Regulation & policy | 5% | 3.0 | 3.0 | 0.0 | 85% |
| Financial expectations | 5% | 6.0 | 6.0 | 0.0 | 75% |
Germany trails the world by 4.2 points and China by 7.3
Chemical production, year-to-date change
Inspect exact values
| Geography | Change | Latest |
|---|---|---|
| World | +1.5% | 2026-06 |
| EU27 | −1.6% | 2026-06 |
| Germany | −2.7% | 2026-06 |
| France | +1.0% | 2026-06 |
| Italy | −3.3% | 2026-06 |
| Netherlands | −6.0% | 2026-06 |
| Spain | +3.3% | 2026-06 |
| Poland | +0.1% | 2026-06 |
| Austria | −4.7% | 2026-06 |
| United States | −2.1% | 2026-07 |
| China | +4.6% | 2026-06 |
| Japan | −4.2% | 2026-06 |
| South Korea | −0.2% | 2026-06 |
| India | +0.6% | 2026-06 |
| Singapore | −8.4% | 2026-06 |
Power and gas both rose; electricity carried the sharper shock
Separate aligned scales · EUR/MWh
Inspect exact values
| Series | July | August | MoM | Range |
|---|---|---|---|---|
| Power | 105.47 | 126.85 | +20.3% | -18.49–487.38 |
| TTF proxy | 54.37 | 62.14 | +14.3% | 52.40–69.81 |
Europe carried the surplus while the US and China weakened
German chemical exports and imports · y/y, January–June 2026
Inspect exact values
| Geography | Exports y/y | Imports y/y |
|---|---|---|
| EU | +4.0% | +4.4% |
| United States | −13.2% | −4.1% |
| China | −2.5% | +2.6% |
| India | +6.2% | +1.9% |
| Japan | −5.3% | −16.0% |
| South Korea | +1.5% | +5.7% |
| Asia | −3.0% | −3.1% |
| Americas | −7.1% | −3.6% |
Guidance improved broadly, but the quality of recovery diverged
Company-reported Q2 or H1 metrics · definitions retained
| Company | Reported signal | Guidance | Cash context | Radar reading | Confidence |
|---|---|---|---|---|---|
| Evonik2026-08-05 | Adjusted EBITDA +24.0%volume and pricing, including Asian supply disruption | EUR 2.0-2.2bn adjusted EBITDA | EUR 49m | cyclical gain with structural cost defence | 90% |
| Brenntag2026-08-12 | Operating EBITDA +41.0%pricing discipline, commercial execution and cost savings | EUR 1.35-1.45bn operating EBITDA | EUR 4m | execution-led gain with subdued EMEA demand | 85% |
| Merck KGaA2026-08-06 | EBITDA pre, organic +9.3%structural growth pockets | full-year guidance upgraded | Not separately reported | structural growth pockets | 95% |
| Henkel2026-08-06 | Organic sales +3.2%portfolio strength with geographic concentration | 1.5-3.5% group organic growth; 2.0-4.0% Adhesive Technologies | Not separately reported | portfolio strength with geographic concentration | 95% |
| Bayer2026-08-04 | EBITDA before specials +1.9%operational progress with balance-sheet constraint | currency-adjusted group outlook confirmed; lower debt target | EUR -371m | operational progress with balance-sheet constraint | 95% |
| LANXESS2026-08-12 | Sales +6.5%volume improvement without durable core-market recovery | EUR 450-550m EBITDA pre exceptionals | Not separately reported | volume improvement without durable core-market recovery | 80% |
Adaptation at home. Optionality abroad.
The type and geography of capital spending distinguish resilience from renewal.
BASF
Logistics hub upgrade · EUR 51m
Ludwigshafen · Germany · 65% confidenceSunfire/BASF
1.3 MW SOEC pilot construction
BASF site · Germany · 80% confidenceEvonik
GMP lipid manufacturing facility · CAD 150m
Vancouver · Canada · 85% confidenceHenkel
Five-acquisition growth programme; four closed · EUR 5bn
Global · Multiple · 95% confidenceBASF/NEO Corporate
Personal-care innovation partnership
Asia-Pacific · Multiple · 80% confidenceOrders, sentiment, pricing and several company accounts improved.
Capacity, energy, logistics and domestic growth investment did not.
The advantage disappears if supply elsewhere normalises first.
The central case is relief without structural repair.
The scenarios are editorial ranges with observable triggers—not statistical confidence intervals.
The central case is relief without structural repair
Three-month Mood Index range · editorial probability
- Temporary substitution: 3.2–4.0 / 10. 55% editorial probability. Supply disruption sustains orders and margins while inventories absorb much of demand.
- Genuine volume recovery: 3.8–4.6 / 10. 20% editorial probability. Orders broaden into production, investment and hiring.
- Reversal after normalisation: 2.4–3.2 / 10. 25% editorial probability. Asian supply returns while German energy and logistics costs stay high.
Inspect exact values
| Scenario | Probability | Range | Mechanism |
|---|---|---|---|
| Temporary substitution | 55% | 3.2–4 | Supply disruption sustains orders and margins while inventories absorb much of demand. |
| Genuine volume recovery | 20% | 3.8–4.6 | Orders broaden into production, investment and hiring. |
| Reversal after normalisation | 25% | 2.4–3.2 | Asian supply returns while German energy and logistics costs stay high. |
Does the improvement enter the factory?
- 01chemical production month-on-month and year-on-year
- 02capacity utilisation above 75% and then 76%
- 03export orders after easing of Hormuz disruption
- 04German power below EUR 100/MWh
- 05TTF below EUR 50/MWh
- 06Rhine gauges and barge load factors
- 07guidance breadth beyond pricing beneficiaries
- 08new German growth-capacity final investment decisions
- 09chemical employment plans
What can move the verdict?
Asian supply normalises before German costs fall
high impact
Power and gas remain above July levels
high impact
Rhine disruption persists
high impact
Further job and site restructuring
medium high impact
US and China export weakness deepens
high impact
Infrastructure spending converts into chemical orders
medium high impact
Electronics and life science scale further
medium high impact
PPWR accelerates substitution chemistry
medium impact
Energy-resilience pilots reach final investment decisions
high impact
Schym’s TakeThe German chemical industry did not imagine August’s improvement. Orders did arrive. Prices did rise. Several companies did earn more money. The mistake would be to confuse the place where the profit appeared with the place where the recovery originated.
A durable recovery would look less dramatic and more boring: higher utilisation, predictable energy, domestic growth projects, stable employment expectations, and export gains that survive the reopening of other suppliers.
The index rises because the cycle is no longer uniformly hostile. It stops at 3.4 because the Standort is still waiting for evidence.
Methodology, limitations and no-data register
Immutable core
- exact calendar month
- Germany-centred with explicit global benchmarks
- immutable weights and published history
- observation date separated from publication date
- fact separated from inference
- cyclical separated from structural
- company success separated from sector recovery
- announced policy separated from implemented policy
- investment and innovation tested for domestic capture
- method breaks versioned
- scenario triggers made falsifiable
Known limitations
- Official chemical statistics lag by six to eight weeks.
- Capacity utilisation is Q3-to-date survey evidence, not an August production measure.
- TTF is a front-month proxy and not identical to the prior Cbonds average.
- Electricity interval counts are not comparable with pre-October-2025 hourly counts.
- Corporate figures mix groups, segments and different business models.
- Scenario probabilities are editorial judgements.
No-data register
July or August 2026 official German chemical productionnot available at cutoffJune used as latest hard-data vintage
August 31 German company equity closesnot populated in source feed at cutoffAugust 28 observations labelled provisional
Major German chemical incidentsnone verified from primary sources within cutoffreported as a no-data finding, not absence of incidents
New verified German chemical plant closure announced in Augustnone identified in reviewed primary sourcesno event added
TTF methodology continuitymethod breakfront-month proxy tagged and not backfilled
The edition resolves 20 distinct source endpoints across a 77-row evidence ledger. Source URLs, observation dates, units, periods, confidence and method notes are validated at build time and retained beside their published figures.