German rubber industry sees raw material supply ease despite Middle East conflict

Frankfurt am Main — Germany's rubber industry is reporting improved raw material availability but continues to face elevated costs, according to the latest third-quarter member survey by industry association WDK.

The survey showed that concerns over raw material shortages have eased, although companies see little prospect of meaningful relief on the cost side.

"The previously clearly tense expectations on the raw materials side have calmed down," said WDK chief economist Michael Berthel 22 July.

"Our companies are not currently expecting shortages of raw materials in the short term."

However, Berthel cautioned that the situation remains "highly volatile", particularly amid ongoing tensions surrounding the Strait of Hormuz.

"It is true that the availability of the required materials is currently largely assured. However, raw material prices remain high," he said.

According to the survey, most companies do not expect raw material prices to fall significantly.

"Our companies are still waiting in vain for a real respite in terms of costs," Berthel added.

The findings are also reflected in the WDK raw material index for a typical natural rubber compound, which has recently climbed to its highest level in around two years.

"Availability is one side of the coin, affordability is the other," Berthel said.

"Our businesses depend on both, especially in Germany as a high-energy-price location."

The survey also pointed to an uneven business environment, with export markets performing better than domestic demand.

"There can be no talk of a real recovery yet," Berthel concluded.

"As long as the upfront costs continue to burden companies, the situation will remain fragile. We need quickly noticeable relief in energy costs and bureaucracy in Germany."