The fact that the exemplary medium-sized enterprise Viessmann sold its Climate Solutions division together with its heat pump business to US competitor Carrier Global has sent an important signal. Already the announcement of the deal showed that even large, well-established companies are losing faith in the future viability of Germany as a business location.

For many German plastics converters, the news from the Allendorf-based company will have come as a shock. Not only because some of them will have hoped, as a supplier to Viessmann, to be able to profit from the boom in the heat pump industry motivated by party politics. The fact that, once again, a future-oriented technology is being controlled from overseas reinforces the frequently felt impression that Germany and Europe are in the process of digging their own graves, both economically and geopolitically.

Solar panels and electric cars from the Far East, and the climate technology coming in future from the US – so in which segments of global economic growth does Europe really want to remain among the leaders? Not much is to be expected (any longer) from the chemical industry in this respect. The “big players” in the industry such as BASF, Evonik, and Covestro have long been planning their investment projects in completely different regions of the world, far away from the pedantic bureaucrats in Brussels and Berlin.

Is it then surprising that, in the plastics industry, hardly anything is left of the optimistic mood that emanated from the K trade show last October? The panel discussions that form part of our polymer price reporting indicate with ever more alarming clarity that business in the plastics industry is bad, very bad. In fact, many buyers describe the situation for their companies as difficult to disastrous.

Are there any prospects of an improvement? No. If the urgently needed upswing is delayed month after month, quarter after quarter, there is virtually no room left for optimism, irrespective of how stubbornly state-financed economic research institutes try to dress up the situation.

Some segments of the plastics processing industry are being particularly hard hit: film manufacturers are watching with growing concern the increasing quantities of finished products arriving from Asia. Producers are keeping an anxious eye on the constantly growing delivery capacities and increasing stock levels being built up in Europe by competitors from overseas.

A trend turnaround is at present not in sight. Consequently, there remains only the faith in the irrepressible will of companies to survive, the historically grown conviction of the resilience of European industry, and hope in the understanding and learning capacity of the political class.

Martin Bäcker
Head of Polymer Prices