Wrong Place, Wrong Time – BASF & German Troubles Far From Over, More Strategic Action Needed

Daily Chemical Reaction

Wrong Place, Wrong Time – BASF & German Troubles Far From Over, More Strategic Action Needed

Key Points:

• European chemical producers face the challenges of a global production cost disadvantage and a generally mature consumer growth profile, spurring some to make aggressive strategic moves.
• BASF estimates global chemical production growth will outpace GDP and industrial production growth in 2023 – a consensus view, but demand and cost curve shifts could adjust the order.
• Many non-integrated specialty chemical producers expect price support but falling costs in 2H23 – this setting will likely require an unlikely combo of demand strength and lower oil prices.
• BASF initiatives to transform the Ludwigshafen Verbund site to net zero emissions by 2045, may be more expensive than closure! We also flag Origin Materials’ very big year in 2023.
• We highlight the recent movement in US used-car values and inventory and that some global auto-build views for 2023 provide suppliers hope despite falling consumer affordability.

See PDF below for all charts, tables and diagrams