* Trade group sees sales up 1 pct vs 1.5 pct previously
* Says industrial customers spooked by Ukraine-Russia crisis
* Q2 sector sales flat year-on-year, prices down 1.7 pct
* Says demand should pick up slightly in H2
(Adds comment by VCI president, Q2 figures, background)
FRANKFURT, Sept 2 German chemicals trade group
VCI on Tuesday cut its sales growth forecast for 2014 as the
crisis in Ukraine and trade sanctions against Russia rattle
industrial customers and weigh on the overall economy.
"The German chemicals sector suffered an economic setback in
the second quarter," VCI President Karl-Ludwig Kley said in a
Weak investment spending and slow trade led the German
economy to contract for the first time in over a year in the
second quarter, data showed this week, suggesting the country is
running out of steam just as the impact of the crisis in Ukraine
starts to bite.
Chemicals businesses based in the country reported revenues
in the three-month period stagnated from a year earlier as
prices for petrochemicals and polymers slid and demand for
industrial detergents weakened, said VCI, which represents
Germany's No.3 industrial sector.
Kley said demand should pick up slightly in the second half
of the year if the geopolitical environment does not worsen but
VCI still cut its forecasts for 2014.
VCI now sees 2014 revenues growing by 1 percent to 192.5
billion euros ($253 billion), compared with a previous outlook
for 1.5 percent growth. It sees output volumes up 1.5 percent
and prices down 1 percent, compared with previous expectations
for 2 percent growth and a 0.5 percent decline, respectively.
The largest German chemical and plastics makers are BASF
, Evonik, Bayer and Lanxess
. Europe's largest chemical producing nation is also
home to subsidiaries of major foreign producers such as Dow
Chemical, DuPont and LyondellBasell.
($1 = 0.7617 euro)
(Reporting by Maria Sheahan; Editing by Christoph Steitz and