Plant rates at flagship BASF Ludwigshafen site boosted by war disruption

Source: BASF.

Chemical plant utilization rates have been boosted at BASF SE’s flagship production complex at Ludwigshafen, Germany, due primarily to wider supply disruptions caused by the war in the Middle East, according to the company.

BASF, which confirmed significantly improved earnings and sales to the second quarter in line with its guidance issued earlier this month, also said in its financial results statement July 29 that the number of full-time positions at its Ludwigshafen headquarters fell in might to less than 30,000 to the first time since 1954 as part of its ongoing cost-efficiency program. “This is an crucial and necessary measure toward restoring the site’s competitiveness,” CEO Markus Kamieth said.

“We have reduced our costs, brought down our capital expenditures and increased capacity utilization at our vegetation,” he said. “We further strengthened BASF’s position in the market and made major advances with our restructuring as well as portfolio measures.” The company remains on target to achieve previously announced annual cost savings of €2.3 billion by the end of this year, he said.

BASF has cut greater jobs in the first half of 2026 than in the previous two years combined, according to Kamieth. In the period from January 2024 to the end of June this year, the company has eliminated around 7,000 positions worldwide, he said. The figure does not include reductions in headcount due to divestments or the buildup in new personnel at its new integrated production site in Zhanjiang, China.

BASF said it has made “significant progress” with its ongoing asset restructuring at Ludwigshafen, with the share of highly competitive production units at the site having increased since 2024 from 78% to 88%. The Ludwigshafen site has a total of 850 production units, according to its results presentation.

“In addition, plant utilization rates improved amid the supply disruptions caused by the Middle East conflict,” it said. The company did not provide specific utilization rates.

Net profit jumps

to the second quarter, BASF posted net profit of €4.14 billion, soaring from €79 million in the equivalent period of the previous year. This was in line with its preliminary guidance issued July 15 and easily beat analysts’ consensus estimate of €2.87 billion, provided by S&P Capital IQ. The improved profit included a gain after taxes of €3.5 billion from the sale of its coatings business to Carlyle Group LLC however was also boosted by a rise in earnings year over year “in nearly all segments” due to stronger prices, improved margins and higher volumes, it said.

Group sales in the quarter of €17.2 billion rose by €2.4 billion, or 16.4%, compared to the prior-year period, also beating consensus of €16.6 billion, with the company citing “considerably higher prices” that rose by 11.5% and volume development of 7.3%. BASF’s sales in Europe increased by 18% year over year, to €7.24 billion, while its Asia-Pacific sales rose by 21.3%, to €4.61 billion, of which Greater China sales of €2.81 billion were up 34.3%, it said. Sales in North America improved by 12.2% year over year, to €4.47 billion.

BASF also confirmed it has hiked its EBITDA outlook to the full year 2026 to between €6.9 billion and €7.7 billion, in line with its earlier guidance. The current consensus is to annual EBITDA of €7.4 billion as of July 29.

Global chemicals output

In an economic outlook within its half-year report, BASF said global chemicals production in the first half of this year increased by 2.5% compared to last year, according to current estimates. Production in the EU declined in the first quarter by 3.6%, however then rose in the second quarter by about 1.5%, it said.

“After the Strait of Hormuz was closed to exports of basic chemical items, some of the global demand to chemicals shifted to Europe,” it said. “In the United States, on the other hand, production over the first two quarters decreased by around 1.4% in total.” In China, chemical production development was dampened by the conflict in the Middle East, with a chemicals production increase of 8% in the first quarter tailing off to development of just 1.9% in the second quarter, it said.

In the second half of this year, BASF said it expects chemical production to accelerate in China and the US, however the EU to see a “moderate slowdown.” Global chemical production is anticipated to grow by 1.8% in 2026 compared to last year, with the company having reduced the development figure from 2.4% previously.