Economic and Legal Factors
WACKER sells its products and services to virtually every industry. Although our business divisions are not immune to economic fluctuations, their onset and impact may vary. Our product portfolio and broad customer base enable us to mitigate the magnitude of such fluctuations.
Economic factors impacting our business
The main economic factors influencing WACKER’s business remained unchanged in many areas.
Raw-material and energy costs
As a chemical company, we belong to an energy-intensive industry and require diverse raw materials to manufacture our products. Consequently, raw-material and energy costs have a significant impact on our cost structure. Energy and raw material prices fell slightly overall in 2025 amid the general economic slowdown. WACKER strives to keep costs at a competitive level, which is why it works together with multiple suppliers for most of its key raw materials. The supply contracts are structured to grant WACKER sufficient flexibility as regards volumes, and to ensure competitive procurement of raw materials by adopting suitable pricing mechanisms. However, a problem is posed by the fact that some prices in Europe are significantly higher than in other regions due to regulatory requirements. Contributory factors include not only the CO2 emissions trading system (ETS), but also energy taxes, anti-dumping import duties and, in the case of electricity, shutdowns of conventional power plants for political reasons, and sluggish grid growth. Although the electricity and natural-gas prices paid at European industrial sites are very high due to Russia’s attack on Ukraine, they did decrease between 2023 and 2025. Nevertheless, they are still markedly higher than in other regions. In 2025, WACKER continued to strongly advocate the introduction of an industrial electricity price at internationally competitive terms. While the German government has started to implement the option enabled at European level to set up national industrial electricity price models, a number of relevant details regarding the actual structure have yet to be clarified as the legislative process remains ongoing.
Exchange-rate fluctuations
As a rule, WACKER hedges against exchange-rate fluctuations. We hedge about half of our US dollar exposure for the following year with a mix of currency-hedging transactions. In determining sensitivity, we simulate a 10-percent devaluation of the US dollar against the euro. Without hedging, such an increase in the euro against the US dollar would have a negative impact on EBITDA of around €27 million. There are still hedging transactions in Japanese yen (JPY) that were concluded back in 2021 and 2022 and will run until 2033.
Polysilicon-related tariffs and market barriers motivated by trade policy considerations
As one of the world’s leading suppliers of hyperpure polycrystalline silicon, we are sensitive to demand trends in the semiconductor and solar industries. Both the semiconductor market and the solar power industry are also affected by tariffs and market barriers motivated by trade policy considerations.