Lanxess said it will raise prices for its chemical products to compensate for sharply higher costs for energy and raw materials, a move the company tied directly to the ongoing U.S.-Israeli war on Iran. The specialty chemicals group disclosed the decision on Thursday after issuing its annual results and revealing plans for job cuts earlier in the day.
The company said the conflict, which it described as continuing into its third week, has pushed prices higher across the chemicals sector and unsettled markets more broadly. The firm said those developments have created concern that a widening war could trigger an oil price shock, boost inflation and weaken consumer demand.
Lanxess CEO Matthias Zachert told reporters that the firm had seen its energy and material bills climb since the conflict began. "We have to do something about it and pass on these price increases, so that we do not have to foot the bill," he said. Zachert added that competitors were pursuing similar steps and that Lanxess had acted early "in order to counteract as early as possible."
The company emphasised that chemical manufacturers have been especially vulnerable because many of the industrys feedstocks and raw materials are produced in the Middle East. Several other firms in the sector, including Brenntag, Wacker Chemie and BASF, have also started to raise prices in response to surging energy costs, the announcement said.
In a separate statement on Thursday, Germanys chemical industry association VCI warned that the war had markedly increased risks to the global economy, pointing in particular to disruptions linked to the blockade of the Strait of Hormuz. The lobby group said that, as a consequence, "strong price increases are expected, especially for products where the region plays a central role in the global trade."
Lanxess framed its pricing action as a necessary step to avoid absorbing rising input costs following the deterioration in the geopolitical environment. The company did not provide further details on the scale or timing of the increases in its statement accompanying the earnings release and workforce reduction notice.
Observers and market participants will be watching whether continued conflict in the Middle East leads to broader and more sustained pricing pressure across chemical products and related supply chains.