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Dow and BASF post upbeat first-quarter results

Companies say they see signs of a chemical recovery

by Alexander H. Tullo
April 25, 2024 | A version of this story appeared in Volume 102, Issue 13

Two workers in hard hats appear to inspect some equipment in a chemical plant.
Credit: BASF
BASF, Linde, and Sabic recently opened an electric cracking joint venture in Ludwigshafen, Germany.

First-quarter financial results are out from Dow and BASF. And if these two chemical giants are setting the trend for their peers—which are due to report their results over the next several weeks—the industry may be turning the corner after a dismal 2023.


BASF’s decline in first-quarter sales


Dow’s decline in first-quarter sales

Dow’s sales fell 9.2% from the year-earlier period, while adjusted earnings slipped 5.1%. Sales and prices were down across all its business.

But compared with the fourth quarter of 2023, Dow’s sales and earnings were up 1.4% and 28.8%, respectively. A small decline in its core packaging and specialty plastics segment was more than offset by growth in its industrial intermediates and infrastructure business and its performance materials and coatings unit.

Excess capacity hit the petrochemical industry hard last year, particularly in high-cost regions such as Europe. But Dow CEO Jim Fitterling was upbeat during his April 25 conference call with analysts. “Most of the capacity is in the market already, and we’re seeing volume growth,” he said.

Dow’s own operating rates rose 10% in the first quarter, Fitterling reported. And he said lower-cost locales like the US and the Middle East should perform strongly. “We have been through the worst of it on the slowdown in the cycle,” he added.

BASF announced that it “got off to a solid start in 2024.” Its sales fell 12.2% and its earnings dropped 12.9% from the year-earlier quarter. The company attributes the decline primarily to lower prices. A few key businesses, such as chemicals, materials, nutrition, and personal care, saw improvements in volumes.

Earnings before taxes beat analyst estimates. And versus the fourth quarter, BASF posted a 10.6% increase in sales. It had posted a loss in the previous quarter.

“The volume recovery continued, but slowly,” BASF chairman Martin Brudermüller said in prepared remarks. “This trend is also visible in a sequential comparison, as volumes increased slightly in Q1 2024 compared with Q4 2023. Even so, we cannot yet confirm a fundamental turnaround in industry dynamics. For this, we will need to see the current positive trend continuing in the coming quarters.”



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