Ifo's indicator on the sector rose to -15.7 points in February from -16.1 in January, in seasonally adjusted terms.

The demand for chemicals rose for the first time in two years, with customers placing more orders, and chemicals companies increasing production during the month, as electricity and gas prices stabilize, Ifo survey said.

However, business expectations turned somewhat pessimistic again, the institute added.

"The climate in the German chemical industry is still rough, but there have also been some surprising rays of hope," - Ifo's expert Anna Wolf said.

(Reporting by Klaus Lauer, writing by Andrey Sychev; editing by Bartosz Dabrowski)