BASF CEO: Conflict in Iran May Lead to Shortage of Raw Materials for Automakers
Markus Kamieth, CEO of German chemical giant BASF, recently stated that persistently high inflation, coupled with the risk of supply chain disruptions triggered by the Middle East conflict, paints a bleak outlook for the automotive industry and the broader economy.
Speaking at a media roundtable in Frankfurt, Kamieth noted that the likelihood of shortages of various raw materials is continuously rising, which could bring the intricate, interconnected supply chains of industries like automotive manufacturing to a halt. He mentioned that the conflict in the Middle East has already led to tight supplies of industrial raw materials such as sulfur and helium.
BASF is a core chemical supplier to the global automotive industry, providing paints, plastics, catalysts, battery materials, and various chemical products to automakers and their suppliers. The automotive sector relies on thousands of components and raw materials sourced from around the world; a shortage of basic chemical raw materials can easily lead to assembly line shutdowns.
Kamieth said, “This is the downside risk I foresee for the industry in the second half of this year. The hidden dangers of shortages of various raw materials are gradually emerging, and we cannot rule out the possibility of a complete cutoff of certain raw materials in the future.”
The BASF CEO’s remarks highlight the challenge faced by policymakers and companies worldwide in predicting the cascading impacts of the Middle East conflict. Procurement teams at automakers such as Volkswagen and Mercedes-Benz are working hard to mitigate related effects, but supply issues in upstream basic raw material sectors like chemicals and metals are often difficult to detect in the early stages.
Headquartered in Ludwigshafen, Germany, BASF is a world-leading chemical company with production bases around the globe, making it particularly vulnerable to the impacts of geopolitical conflicts. BASF’s European plants are deeply integrated with the local automotive supply chain, and the company recently completed a large new production base in China.
