WDK: German rubber industry set to post 3-percent growth for 2021

FRANKFURT, Germany—The German rubber industry is set to post a 3-percent growth in 2021, well under previous forecasts of "a double-digit increase" announced earlier in the year.

A "fragile procurement market" is the core reason behind the decline in the growth, explained Michael Berthel, chief economist at the German rubber industry association (WDK).

Industry sales in the first three quarters consolidated at about 16 percent compared to 2020, said Berthel, addressing the WDK autumn conference held in Frankfurt on Nov. 18.

On the other hand, he said, there has been "a clear dichotomy" in the fourth quarter.

"While the non-automotive sector is booming, demand is breaking away from automotive suppliers at the end of the year," said the WDK economist.

According to Berthel, both sales and production reflect a "dramatic loss" of take-up from the part of vehicle manufacturers, compounded by 'a fragile procurement market.'

"The supply chains are overstretched, and a relief is not in sight," said Berthel, adding that logistics woes have also impacted the supply of raw materials.

As a result, there are "exorbitant price increases" for all industrial raw materials, he said, including rubbers, fillers, chemicals and metals.

The price increases are "consistently in the high double-digit percentage range," he said. Prices have almost doubled for styrene butadiene rubber (SBR), for example.

In November last year, Berthel predicted a 16-percent growth for the German rubber industry for 2021 compared to $10.5 billion in 2020.

In February, Berthel confirmed the forecast of double-digit sales growth but said it was accompanied by warnings that "turbulent raw material markets" and "fragile logistical supply chains" could threaten recovery.