Iran War Pressures German Industry with Raw Material Shortages

SadaNews Economy - A recent report has shown that German industrial companies are receiving fewer quantities of materials due to the Iran war.

The percentage of companies that reported supply chain bottlenecks during April has reached 13.8%, more than double its level in January when it was at 5.8%, according to a survey conducted by the Ifo Institute for Economic Research.

Klaus Wohlrabe, the director of the institute's surveys, said on Thursday in Munich: "Supply chains are under significant pressure... the conflict in the Middle East and the restrictions on shipping movements through the Strait of Hormuz are increasingly affecting the supply of raw materials."

According to the data, shortages are particularly increasing in sectors that heavily rely on oil-based raw materials and energy-intensive products. In the chemicals sector, nearly one-third of companies (31.1%) have been affected by material shortages.

The proportion among manufacturers of rubber and plastic products has also risen to about a quarter of companies (22.9%). The machinery and electrical equipment sectors as well as the automotive industry have also felt this shortage.

Wohlrabe stated: "Current developments show the extent to which the industry relies on global raw material and energy supplies."

Typically, about one-fifth of global oil supplies pass through the Strait of Hormuz between Iran and Oman, but this shipping route has been nearly closed for weeks due to the Iran war.

The Ifo Institute stated: "Especially in petrochemical raw materials, disruptions can quickly reflect across the entire value chain."