Rising Gas Prices Increase Margin Pressure on Chemical and Metal Companies
As of early November, German natural gas storage facilities were only about 62 percent full
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As of early November, German natural gas storage facilities were about 62 percent full. According to current estimates, this will be sufficient to last until the end of the heating season if the winter proceeds normally. However, an unusually cold winter or additional supply disruptions would change that. According to the international credit insurer Atradius, price will therefore be the primary factor determining margins and liquidity for many companies this winter. “Many companies are significantly better prepared today than they were in 2022. Many companies procure a significant portion of their gas needs through long-term contracts and are therefore only partially exposed to short-term market prices. As a result, short-term price spikes affect them less directly,” says Nicole Bludau, Manager of Risk Services at Atradius.
However, this does not completely cushion the impact of gas prices. Individual long-term supply contracts may contain components linked to oil prices. Furthermore, price trends are influenced by factors such as the geopolitical situation, available supply, and weather conditions. If the winter is harsh, additional gas would have to be purchased at a high price on the market. That would further increase costs.
Energy-intensive industries feel the impact first
The higher costs affect different industries to varying degrees. According to Atradius’ assessment, the hardest-hit sectors are the chemical industry, the steel and metal industries, as well as the glass, ceramics, paper, and building materials industries. The retail sector is also feeling the impact of higher heating costs, though to a lesser extent. How well companies can absorb the additional costs depends primarily on their contracts. With price escalation clauses, they can quickly pass on additional costs. Without these clauses, they often adjust their prices only annually or semiannually. “Companies that adjust their prices only once a year initially bear the additional costs themselves. This puts pressure on margins and can strain liquidity,” explains Nicole Bludau. Some companies temporarily accept lower margins to remain competitive internationally. Ultimately, consumers often end up bearing the increased costs when companies factor higher energy prices into their product prices.
Additional cost pressure can also result from CO2 pricing. Which companies are directly or indirectly affected depends on the respective emissions trading system, the fuels used, and the specific facility. At the same time, energy is in some cases significantly cheaper in neighboring countries. Companies are evaluating the possibility of relocating production on a case-by-case basis and weighing this against rising logistics and transportation costs.
The effects will not be reflected in the figures until spring 2027
The growth outlook for 2026 and 2027 is slightly positive, though profitability is under pressure. Revenue growth is a more realistic prospect than higher margins. The extent to which current energy prices are impacting the business will likely only be reliably evident in the final financial statements for 2026. Companies that report quickly could publish these in the spring of 2027. However, operational pressures on margins and liquidity may arise even before then. Until then, the information available will remain inconsistent; initial indications may come from delayed payments and reports submitted after the prescribed filing deadlines.
“We are currently seeing an increase in late payments compared to 2025. However, we attribute these developments more to the general economic situation than directly to current energy prices,” says Nicole Bludau. It will therefore be crucial how well companies can absorb and pass on rising energy costs in the coming months. Long-term procurement, sufficient liquidity buffers, and flexible contract terms can help limit the pressure on margins. Companies should closely monitor their cost trends and contract structures and assess early on when and to what extent they can pass on additional costs.
Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in German can be found here.
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