The largest chemical companies posted upbeat results for the second quarter despite external economic factors, namely the war in Ukraine, which is driving up European energy costs. Chemical executives worry that the coming months could see a full blown crisis that could scuttle European chemical production.
For the second quarter, the world’s largest chemical maker, BASF, posted a 16% increase in sales and a 17% increase in profits versus the same period in 2021. Elemental to the company’s gains were its chemicals and materials businesses, which saw sales increases of 27% and 30%, respectively, mostly due to higher product selling prices.
A weakness for the company was its surface technologies unit, which houses its automotive catalysts business, hit hard by sluggish car production. BASF’s second quarter sales in China declined by 17% due to COVID-19 lockdowns in the country.
In a speech to analysts, BASF chairman Martin Brudermüller said that compared to the first quarter, uncertainty around the economic outlook has increased. “The main reasons for this are the ongoing war in Ukraine, the risks associated with natural gas supplies in Europe, and the resulting high prices for raw materials and energy as well as China’s zero-COVID strategy and related lockdowns,” he said.
For those of us (myself included) who are thinking about an economic downturn in late 2022, this is good news. Now we wait for winter...