Iran Crisis Threatens Europe's Chemical Industry with Severe Shortages
The ongoing Iran crisis is set to deepen supply chain disruptions, particularly in the chemical industry. Covestro CEO Markus Steilemann has warned that Germany and Europe will face the worst impacts, with shortages of key raw materials likely to worsen in the coming months. Steilemann highlighted that transport routes for raw materials from Iran remain open for now. However, future disruptions could severely limit access to essential supplies. Countries like Japan and South Korea are already struggling, as oil and gas shortages restrict their ability to produce goods for export.
Prices for certain chemical raw materials have risen sharply, not because of excess production capacity but due to limited availability. Covestro is now exploring alternative supply chains for a small range of products to reduce the risk of shortages. Temporary unavailability of materials in specific regions remains a growing concern. The CEO also stressed the need for Germany to maintain strategic value chains as reserves. This would improve resilience against future crises. Companies are under increasing pressure to invest in transformation, even if these changes do not immediately boost output. Steilemann cautioned that the indirect effects of the crisis—such as inflation and job losses—will likely persist far longer than the immediate disruptions.
The chemical sector must adapt quickly to avoid prolonged shortages. Alternative supply chains and strategic reserves could help ease pressure on production. Without intervention, the economic fallout from raw material shortages may extend well beyond the current crisis.
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