BASF confident in resilience despite Iran tensions, economic woes

BASF's finance chief, Dirk Elvermann, expressed confidence in the chemical giant's resilience amid global economic headwinds and geopolitical instability, particularly concerning the Strait of Hormuz.

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In this difficult global economic climate, BASF is performing exceptionally well.

"BASF is performing exceptionally well in this difficult global economic climate," Elvermann told dpa-AFX. He attributed the company's strength to its diversified regional presence, integrated value chains, and flexible raw material sourcing. This flexibility allows BASF to switch to butane and propane when naphtha prices are high, a significant advantage in current market conditions.

The temporary closure of the Strait of Hormuz has had only an indirect impact on BASF, as the company has limited operations in the Middle East and does not rely heavily on shipments through the waterway. However, Elvermann cautioned that prolonged disruptions could affect global demand, which would eventually impact BASF.

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This means the company can increase prices for its products without significantly impacting demand.

He noted a growing demand from European customers seeking reliable second suppliers, boosting BASF's pricing power. The company is also implementing cost-saving measures and restructuring production, including a reduction in workforce at its Ludwigshafen site. Elvermann urged European policymakers to strengthen industrial and competitive policies to ensure the continent's global standing.

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Productivity, investment, and competitiveness must be strengthened.