Gloomy prospects for BASF and the chemical industry: The Ifo Institute believes that the bottom has been reached, but there is no improvement in sight at the moment.
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The Ludwigshafen-based chemical group BASF will have to accept significant declines in sales and profits in 2023. The Ifo Institute does not expect the prospects for the chemical industry to improve any time soon.
DThe gloomy economic situation in the industry has caused BASF to experience a surprisingly significant decline in sales and profits. The chemical company also announced value adjustments worth a good one billion euros on Friday. According to preliminary calculations, operating profit for 2023 has fallen by around two thirds to 2.2 billion euros. Sales fell to 68.9 billion euros from 87.3 billion euros.
Analysts had hoped for smaller losses. BASF shares then fell by two percent in the Lang & Schwarz business and were at the bottom of the DAX. The Ludwigshafen-based company attributes the decline to lower profit margins. Austerity measures could not have compensated for this.
The chemical industry is suffering from weak demand and rising costs. The hoped-for recovery in business in China after the corona pandemic did not materialize. The German chemical industry is facing another difficult year in 2024.
The business climate in the export-heavy industry deteriorated before the turn of the year: the barometer fell to minus 15.2 points in December, after minus 13.0 points in November, as the Munich Ifo Institute announced on Friday in its company survey. “The bottom seems to have been reached in the chemical industry, but there is no immediate upward trend in sight,” said Ifo industry expert Anna Wolf, commenting on the development.
Because of the poor outlook and a quarterly loss, BASF cut investments last fall and announced further savings.
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