The business climate in Germany's chemical industry deteriorated significantly in June, a survey published by the Ifo economic institute showed on Tuesday.

Ifo's indicator on the sector fell to -28.3 points in June from -12.5 in May, in seasonally adjusted terms.

The indicator for business expectations dropped to -25.6 in June from -5.5 the previous month, while assessments of the current conditions fell to -31, the lowest level since June 2020.

"The order situation is continuing to worsen for many companies due to persistently weak global demand for chemical products," Ifo industry expert Anna Wolf said, noting high energy and production costs also continue to weigh on business.

According to Ifo, the supply of intermediate products was "one of the very few positive developments" last month. Only 12.5% of companies reported bottlenecks, the lowest value since 2021.

The survey also showed signs that upward price spiralling is coming to an end, with the majority of companies reportedly planning to lower their prices. (Reporting by Anna Mackenzie, Editing by Rachel More)