BASF sticks to 2025 outlook amid tariffs-linked uncertainty

BASF SE has stuck to its 2025 earnings guidance but said in its first quarter financial results on May 2 that it is unable at present to fully gauge the impact of tariffs on its business and markets due to the “high level of uncertainty, ” said the company.

The chemicals producer cited ongoing market volatility caused by U.S. tariff announcements and the “unpredictability” of further U.S. decisions and potential responses from trading partners.

BASF said in an outlook as part of its quarterly results that “indirect effects are emerging, particularly in terms of demand for our products and prices. The resulting outcome cannot yet be assessed.”

Trade between the U.S. and China “now faces very high tariffs, which are likely to have a considerable impact on direct trade between the two economies,” it said.

In the first quarter, BASF said production momentum in the chemical industry and its customer industries was already “significantly influenced by reactions to anticipated tariff increases by the United States,” adding that developments going forward will “largely depend on the trade policy decisions made by the United States and its trading partners.”

The risks of lower volumes and a price-related margin decrease cited in BASF’s 2024 annual report earlier this year “partially materialized in the first quarter of 2025 and led to a slight earnings decline compared with the prior-year quarter. There is still a great deal of uncertainty regarding volume and price trends for the rest of the year,” it said.

Due to the current environment, a reliable analysis of the impact on the global economy is not possible at present, it said. “The volatility of the tariff announcements and the unpredictability of other decisions by the United States, as well as possible countermeasures by trading partners are causing a high level of uncertainty.”

However, BASF said the company’s exposure to the direct impact of tariffs so far “remains limited” as the majority of its products are manufactured locally for regional markets. “This high proportion of local production is the reason why the direct impact of tariffs on BASF is likely to be limited,” said CFO Dirk Elvermann in its quarterly results announcement. In 2024, more than 80% of the company’s U.S. sales came from goods produced within the country.

In light of the volatile situation, BASF said that “for the time being” it is maintaining its most recent guidance issued in February. This includes anticipated EBITDA before special items of between €8.0 billion and €8.4 billion, and free cash flow of between €400 million and €800 million.

The company is also maintaining its macroeconomic guidance, including forecast growth in GDP of 2.6%, growth in industrial production of 2.4%, and an increase in global chemicals production of 3%.

BASF posted net earnings in the first quarter of €808 million, down 41% year over year, due partly to a one-off charge of €300 million related to its previously announced exit from the Nordlicht wind farm project in the North Sea. However, the net profit reversed from a net loss of €786 million in the fourth quarter of last year.

Group sales dipped slightly to €17.40 billion, from €17.55 billion a year earlier, but rose sequentially from €15.9 billion. Adjusted EBITDA fell 3.2% to €2.62 billion and the company’s EBITDA margin before special items was 15.1%, narrowing slightly from 15.4% in the prior-year period.

Weaker demand and resulting lower sales volumes in the company’s Agricultural Solutions, Chemicals, and Nutrition and Care businesses, along with competitive pressures that weighed on its prices and margins across most divisions, outweighed gains from foreign exchange movements.

“BASF held its position in an increasingly challenging environment,” said Elvermann, stressing the economic benefits of having production assets in all key regions worldwide. “We produce locally for the local markets. Especially in these challenging times, this makes us more resilient than others and is a competitive advantage,” he said.

In addition to the company’s production in the U.S., BASF’s locally produced share in Asia Pacific and South America was also around 80% last year, he said.

“However, BASF must also consider indirect impacts resulting from market uncertainty and changes in customer demand in industries such as automotive and consumer goods. It remains difficult to assess the full impact of the current tariffs and counter-tariffs on BASF’s business at this point in time,” Elvermann said.

We remind, BASF SE has signed an exclusive distributor agreement with Alchemy Agencies (Auckland, New Zealand) to manage its personal care portfolio in Australia and New Zealand, effective May 1, 2025. The partnership will see Alchemy Agencies distribute BASF‘s products in the hair, sun, skin, and body care market. BASF’s personal care portfolio includes UV filters, actives, emollients, emulsifiers, polymers and surfactants.

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Indian methanol market participants have turned cautious about purchases after US President Donald Trump on May 1 threatened secondary sanctions on countries purchasing oil or petrochemical products from Iran, as per Chemweek.

Trump said on his Truth Social platform that countries purchasing oil or petrochemical products from Iran will be subject to secondary sanctions and will not be allowed to do any business with the US.

His comments come after the US Office of Foreign Assets Control on April 30 added seven entities in the UAE, Turkey and Iran to its Specially Designated Nationals (SDN) list due to their involvement with Iran.

Market sources said to Platts, part of S&P Global Commodity Insights the move is yet to show any impact on the inflow of key petrochemicals from Iran to India, while any potential impact could disrupt trade flow.

India continues to remain the second-largest buyer of Iranian methanol after China, with imports of Iranian methanol rising 15.5% to 1.65 million metric tons (MMt) in 2024, according to Commodity Insights’ data.

Market participants in India anticipate a significant inflow of Iranian cargoes beginning in May, following unforeseen delays in cargo arrivals due to a dust storm that affected operations at some Iranian ports, resulting in substantial inventory depletion by the end of April.

“Kandla today was in a stock-out situation, absolutely no stock,” an importer said on May 2. Inventory at the Kandla port was at a record low of 6,980 metric tons on April 15, down 8,657 metric tons from the end of March, according to data from market sources.

Referring to the threat of fresh sanctions on Iran, a market source said, “We have not seen much impact on methanol supplies yet ... It will take some time for any effect on the physical movement of goods to be seen.”

Meanwhile, a Dubai-based seller said there has been a sudden pickup in inquiries for non-sanctioned origin cargoes since May 1.

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BASF SE has signed an exclusive distributor agreement with Alchemy Agencies (Auckland, New Zealand) to manage its personal care portfolio in Australia and New Zealand, effective May 1, 2025, as per Chemweek.

The partnership will see Alchemy Agencies distribute BASF‘s products in the hair, sun, skin, and body care market.

BASF’s personal care portfolio includes UV filters, actives, emollients, emulsifiers, polymers and surfactants.

We remind, BASF SE has stuck to its 2025 earnings guidance but said in its first quarter financial results on May 2 that it is unable at present to fully gauge the impact of tariffs on its business and markets due to the “high level of uncertainty.” The chemicals producer cited ongoing market volatility caused by U.S. tariff announcements and the “unpredictability” of further U.S. decisions and potential responses from trading partners.

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Westlake Corporation reported a first quarter net loss of $35 million, compared to a gain of $174 million in the year-ago quarter, on higher North American feedstock and energy costs, a planned turnaround at the company’s Petro 1 ethylene unit at Lake Charles, LA, and the impact of winter storms and higher mortgage rates on the company’s Housing and Infrastructure Products (HIP) segment, said the company.

The planned Petro 1 turnaround began at the end of January and extended into early April. Excluding one-time items, the company reported a loss of $0.31 per share, down from $1.34 per share in the year-ago quarter and missing the analysts’ consensus estimate of $0.62 per share, as reported by S&P Capital IQ. Net sales declined 4.3% year over year, to $2.8 billion.

Westlake said it now expects 2025 revenue and EBITDA margin in its HIP segment be towards the low end of the previously communicated ranges of $4.4 billion to $4.6 billion and 20%-22%, respectively. “While we don't currently expect recent tariff announcements to materially impact our costs or supply chains, the increased uncertainty and unpredictability of future global trade policy is causing some of our customers to pause activity as they assess the impact of tariffs on their own businesses,” said Jean-Marc Gilson, President and CEO. Global demand remains “well below historical levels,” he added.

Westlake is also reducing its 2025 capital spending target by 10%, to $900 million and raising its cost reduction target for 2025 by $25 million, to a new range of $150 million to $175 million. It achieved $40 million of cost reductions in the first quarter, and previously announced plans to mothball allyl chloride and epichlorohydrin units at Pernis, the Netherlands.

In the company’s HIP segment, winter storms and an uptick in mortgage interest rates contributed to a slow start to the new home construction season in 2025. HIP sales declined 5% year over year, to $996 million, and operating income slid 30%, to $148 million. Segment volume declined 1.7% year over year, and modest cost inflation was not fully passed through to customers.

Higher feedstock and energy costs and planned turnarounds and unplanned outages impacted Westlake’s Performance and Essential Materials (PEM) segment EBITDA by $100 million and $80 million, respectively, compared to the first quarter 2024. Segment sales fell 4%, to $1.9 million, and operating income swung to a loss of $163 million, from a gain of $22 million in the 2024 quarter. Volume was down 2.2%.

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Ethylene prices were assessed flat in Asia last Wednesday, as per Polymerupdate.

An industry source in Asia informed a Polymerupdate team member, 'Prices were assessed flat across the Asian markets on account of steady purchasing trends and a holiday-induced slowdown.'

CFR North East Asia ethylene prices on Wednesday were assessed at the USD 785-795/mt levels, steady from Tuesday.

CFR South East Asia ethylene prices on Wednesday were assessed at the USD 865-875/mt levels, rolled over from Tuesday's assessed levels.

We remind, Kazanorgsintez (KOS, part of SIBUR) has begun testing samples of the new HD 03380 RT brand of heat-resistant low-density polyethylene (HDPE) of the PE-RT (polyethylene of raised temperature, PE-TS) class, intended for pipe extrusion. It is planned that Kazanorgsintez will produce about 9 thousand tons of heat-resistant polyethylene per year at its facilities, which, according to SIBUR, will allow it to meet 95% of the needs of the Russian market and replace imported products.

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