06 May 2011 10:07 [Source: ICIS news]
LONDON (ICIS)--BASF is seeing a strong, cracker-led business environment running into the second quarter driven by demand and prices, but has no plans to add significant additional capacity, company executives of the global chemical giant said on Friday.
“We have seen strong cracker margins throughout the first quarter, we believe primarily driven by strong demand,” management board member and new CFO Hans-Ulrich Engel said.
However, new CEO Kurt Bock added that the company has no plans to add a cracker to its portfolio.
Bock and Engel take their new positions after BASF’s annual general meeting on Friday.
“Prices are very strong in the
BASF reported a “powerful” start to 2011 with good capacity utilisation. Net profit in the first quarter of 2011 more than doubled to €2.41bn ($3.49bn) from first quarter 2010 on year-on-year sales, which were 25% higher at €19.36bn.
Operating income – earnings before interest and tax (EBIT) before special items – was up 38.6% from the year-ago period at €2.55bn.
Chemical division operating profits for first quarter 2011 hit a record €765m from €461m in first quarter 2010 and €537m in fourth quarter 2010.
First quarter sales rose 27% year on year to €3.28bn. Sales for the petrochemicals sub-sector were up 28% year on year at €2.21bn. Margins were particularly strong in acrylics and caprolactam (capro).
BASF runs its crackers primarily to support its downstream chemicals activities.
Operating rates are high, Engel said, with the favourable margin situation running into the second quarter.
“Demand is strong and this is driving the pricing situation,” he added.
The company is also positive for the near-term business environment.
“What we have now on our [order] books gives us some visibility for the next two months,” Bock said.
BASF is a “small” net buyer of propylene (C3), a small net seller of ethylene and a net buyer of butadiene (BD).
$1 = €0.69
For more on BASF, visit ICIS company intelligence
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections