BASF in Europe
March 31, 2022
BASF could stop production if natural gas supplies fall to half its needs – Reuters
Mar. 30, 2022 2:19 PM ETBASF SE (BASFY)BFFAFBy: Carl Surran, SA News Editor3 Comments
BASF (BASFY -2.9%) warns of potential damage to its operations from Europe’s power crunch, saying it would need to stop production if natural gas supplies fall to less than half its needs, Reuters reports.
There is no substitute for natural gas as a raw material or as an energy source, BASF says, and gas shortages would leave it without not enough energy for the chemical production process, and lack of a critical raw material for the manufacture of products.
In Europe, the company says it uses 60% of the gas it buys to generate energy needed in production and 40% as a raw material to produce important basic chemicals and a large number of products for almost all industrial sectors.
BASF has said it plans to increase capex spending every year until 2024, but high energy prices are weighing on its performance, Ellsworth Research writes in an analysis posted recently on Seeking Alpha.