Company News
June 11, 2026
Urethane Highlights from Dow Presentation
Dow Inc. (DOW) Presents at 16th Annual Wells Fargo Industrials & Materials Conference Transcript
Jeffrey Tate
Chief Financial Officer
Great. Yes. Thanks, Mike, and I appreciate the opportunity to be here. So before we get into the Q&A, I’d just like to share some insights on the current macroeconomic backdrop, as well as Dow’s execution, as well as our financial position. So on the macro side, global demand across our key end markets remains largely consistent with our prior updates and the supply picture continues to favor both Dow as well as the industry. On execution, all three of Dow’s operating segments are performing well as the second quarter progresses. And as it relates to our financial position, Dow’s balance sheet is solid, and our self-help actions were designed to build a more agile and resilient company that outperforms peers across the cycle.
So turning to Slide 2. Let me start with the macro backdrop. We’re continuing to characterize the current environment as relatively stable on the demand side, but increasingly constrained and more complex on the supply side.
So far this quarter, we are seeing higher volumes when compared to the same period over the past several years. And specific to global polyethylene, which goes into essential applications like packaging for food preservation, demand remains resilient. And this is evidenced by our strong pricing actions continuing to take hold. Additionally, we are seeing stability in both consumer and infrastructure applications, largely due to typical seasonal demand uplifts that we expected. And while some reports are showing subdued consumer confidence in many regions, purchasing patterns tell a different story. Retail spending for do-it-yourself and coatings-related applications is stable going into traditionally high seasonal periods.
Now the one area that is showing signs of declining demand since April is across automotive markets as consumers continue to delay large purchases. And while high fuel prices are driving some increased interest in electric vehicles, we have not yet seen that translate into increased sales.
Now in terms of supply dynamics, a meaningful portion of global oil, ethylene and polyethylene capacity remains off-line, constrained or otherwise disrupted as a result of the ongoing conflict in the Middle East. Now given the scale of these supply constraints, we believe the fundamentals are increasingly supportive of tighter near- to medium-term markets. So a conflict resolution and subsequent reopening of the Strait of Hormuz would begin to restore supply, but the impact would not reverse overnight. With capacity disruptions and inventories depleted, it will take several quarters for supply chains to normalize and inventories to rebuild.
Additionally, significant infrastructure across the Middle East has been damaged, prolonging the impact of the conflict further out than the timing of any potential resolution. Rapidly escalating petrochemical prices have led to cautious buying behavior in select areas, which is to be expected. Global oil inventories are also rapidly declining, reaching multi-year lows following a large build throughout 2025. And as we enter peak demand season, stockpiles are being drawn down at a record pace and the world is quickly approaching operational floor levels. The Americas, however, remain advantaged. Dow continues to benefit from strong feedstock availability in the region, well-supplied natural gas markets and elevated oil-to-gas spreads, reinforcing the region’s structural cost advantage and increasing export opportunities.
So in summary, demand remains largely stable and supply dynamics remain constructive. Over time, this combination should further support the current constructive pricing and margin environment.
Now turning to Slide 3. Constructive industry dynamics paired with our differentiated portfolio positions Dow well to capture meaningful earnings upside, both from an operational and commercial standpoint. We’ve already seen positive momentum from our global pricing actions, but with that, it’s important to note that pricing still remains below prior peak levels despite what we would characterize as an unprecedented supply environment. So there is a disconnect between supply disruption and full price realization, which we expect to continue improving over time.
And this was evidenced in April when pricing in many parts of the portfolio settled stronger than consultant forecast. In our largest operating segment, Packaging & Specialty Plastics, roughly 80%, 8-0, of our portfolio is tied to higher value, more resilient applications. Global polyethylene demand remains robust, especially in the Americas. And while we saw some prebuying activity in Asia and Europe, it has been followed by normal customer purchasing behavior. Additionally, we have seen no change globally in our order books regarding order cancellations, which is a positive sign of underlying demand and support for future margin stability.
In addition to the price increase that was implemented in April, we have a $0.20 price increase announced for the month of June, supported by industry market dynamics and historically tight supply. At the same time, we’re maintaining flexibility on our asset base, including progressing planned maintenance on our Terneuzen 3 cracker, our lowest cost asset in the European region, which we anticipate restarting this month. The work was completed on budget and on an adjusted time line that supported both idling of the asset in mid-2025 and a subsequent restart in line with the regional market demand.
And in our Industrial Intermediates & Infrastructure segment, supply-demand dynamics remain constructive, supporting positive pricing momentum across key value chains, and our order books for the segment are strong relative to prior periods.
Performance Materials & Coatings is entering a seasonally stronger demand period, especially in coatings, where we expect both near-term volume growth and margin expansion. Additionally, we are making significant progress against one of our largest near-term self-help actions, the shutdown of our higher-cost siloxanes unit in Barry, United Kingdom, which we began last month. The team executed the work safely, on budget and several weeks ahead of schedule.
So looking across the entire Dow portfolio, our key differentiators continue to be our feedstock flexibility in Europe, our geographic and asset integration, especially in the cost advantage Americas and the agile regional supply chains we built in every business that allow us to adapt and respond quickly. That combination allows us to capture upside when conditions improve while maintaining discipline during periods of volatility. Going forward, we’re focused on executing with discipline, driving pricing in every business and in every geography and leveraging our structural advantages to deliver consistent performance.
So with all the puts and takes, we expect to deliver second quarter earnings of approximately $2.2 billion, which is above current consensus and roughly 10% above our prior guidance. This is largely driven by continued resilience in polyethylene demand and pricing as well as margin upside in Industrial Intermediates & Infrastructure.
Michael Sison
Wells Fargo Securities, LLC, Research Division
But anybody on the webcast, I am live on Bloomberg Messenger, if you do have a question, just send it to me. But I guess just let’s start with the better-than-expected 2Q, a little bit $200 million better than your initial guidance. Any color between the segments or the business units that is driving that upside?
Jeffrey Tate
Chief Financial Officer
Sure, Mike. Even when we announced our earnings back at the end of April, one of the things that we did highlight is that we saw more potential upside than we did downside to our original guide, which was $2 billion. And in that original guide, there were two key things that we felt like there could be that upside that will come to fruition. And we’re seeing this materialize really across the entire portfolio, but two things really stand out. Obviously, the strong pricing momentum that we captured not only from the $0.10 in March, but also the $0.30 in April that we were capturing, which was higher than consultant forecast at the time. Consultant forecast were projecting $0.20 for April. And so capturing that $0.30 gave us a little bit more upside.
But we also, in our Industrial Intermediates & Infrastructure segment because of tightness that you continue to see in the industry on supply, have seen both polyols and MDI, really capture some of that upside for 2Q as well. So when you think about it, consensus right now is at $2.1 billion, which more than likely captured a lot of that polyethylene pricing for April. But then that additional upside that we’re seeing above consensus right now is really driven by what we’re seeing coming out of our II&I segment for both polyols and MDI.
Michael Sison
Wells Fargo Securities, LLC, Research Division
Okay. We’ve seen price increases in MDI and the polyols side. Benzene is up though a lot. Is it the spread that has improved? Or is demand a little bit better?
Jeffrey Tate
Chief Financial Officer
Well, I would say, obviously, we’re going into a higher demand season, right, here. And for us, and this is more of an overall Dow statement, for second quarter, June is really that peak demand month for us, where we capture about 40% of our volume during the month of June for the second quarter. So we’re going to be going into that ramp of the high seasonal volumes in June, while at the same time, capturing a lot of the pricing activity that we had already in the marketplace for II&I, A lot of that driven again by the tightness of supply.
June 10, 2026
Antitrust Update
MDI/TDI antitrust lawsuit sees new progress as BASF and Covestro reach settlements
2026-06-10 09:11:05Source:ChemNet中文
Hartley LLP, a U.S. law firm, announced that in the antitrust litigation regarding polyurethane raw materials, following BASF’s lead in reaching a settlement, the plaintiffs have finalized a second settlement agreement with Covestro’s U.S. subsidiary.
Previously, BASF reached the first settlement with the plaintiffs, with a settlement amount of $3 million. The settlement amount related to Covestro this time was not disclosed, but it is reported to be several times that of the former. Both agreements are still subject to formal court approval. Jason Hartley, a partner at the law firm, stated that they will continue to advance claims against the remaining defendants.
Both parties submitted an application on May 4, 2026, requesting court approval for the BASF settlement agreement. According to the agreement, BASF will pay $3 million and cooperate with the plaintiffs’ related work in exchange for litigation immunity, although the company denies all related allegations. Shortly thereafter, on May 8, the plaintiffs completed the second settlement negotiations with Covestro’s U.S. subsidiary.
Court documents mentioned that the first settlement serves as an “ice-breaking move” in the case, which not only saves judicial resources but is also expected to prompt the remaining defendants to participate in negotiations.
Jurisdiction Ruled Several Times: Only Covestro’s U.S. Subcompany Involved in Litigation
Throughout the trial of this case, disputes over jurisdiction were constant. In January 2026, the U.S. District Court ruled to dismiss the lawsuit against Covestro’s parent company due to lack of jurisdiction. The court held that the independent legal personality of the enterprise should be respected, and relying solely on the parent-subsidiary relationship is insufficient to bring a foreign entity under the jurisdiction of U.S. courts.
However, this ruling does not apply to Covestro’s U.S. subsidiary, Covestro LLC, which remains a defendant in the case. The settlement agreement reached this time also targets only this U.S. subsidiary.
Case Origin: Filed in 2018 Accusing Companies of Conspiring to Raise Prices
This diisocyanate antitrust lawsuit (Case No.: 2:18-mc-01001) is being tried by the U.S. District Court for the Western District of Pennsylvania, and the case began in June 2018.
A group of MDI and TDI purchasers filed a class-action lawsuit, accusing BASF, Dow Chemical, Huntsman, and other chemical companies of colluding to limit production, using their market supply dominance and the lack of alternative product categories to conspire to manipulate prices and artificially inflate the market. All implicated companies have denied the allegations, stating that the lawsuit stems from a previous inconclusive investigation by the U.S. Department of Justice.
Tortuous Proceedings: Jurisdiction Disputes Fluctuated Repeatedly
The path of the case proceedings has been tortuous, with jurisdiction objections being the main point of contention:
In March 2020, the local judge dismissed jurisdiction objections raised by companies such as BASF, Covestro, Mitsui Chemicals, MCNS, and Wanhua Chemical, determining that existing evidence could support the continuation of the lawsuit, citing clues such as synchronized price increases, deliberate production stoppages and supply cuts, advance communication on pricing between companies, and private industry gatherings.
In 2022, the case was reassigned to a new presiding judge. After a review of facts related to jurisdiction, Covestro and Wanhua Chemical again filed motions to dismiss the lawsuit.
In January 2026, the court ruled again that it could not exercise jurisdiction over Covestro’s parent company and Wanhua Chemical, thus ending claims against the two foreign parent companies.
Plaintiff’s Statement: Comprehensive Value of Settlement Exceeds Continued Litigation
In the documents submitting the application for approval of the BASF settlement agreement, the plaintiffs stated that since the case was filed in 2018, there has been intense contention between the parties in various stages of the litigation, and it is anticipated that disputes will continue during the subsequent trial.
After a comprehensive assessment, it was concluded that this settlement plan can provide actual economic compensation to the participants of the class action. Combined with the cooperation of the defendants, the overall value far exceeds the various risks involved in continuing the litigation. Currently, the case is still ongoing, and its future direction remains pending court rulings and the strategic interplay of the parties involved.
June 8, 2026
BASF Discusses the Zhanjiang Verbund Site Launch
Zhanjiang Verbund Site Launch and Strategic Investment in China Transcript
Jun 08, 2026, 1:28 PM ETBASF SE (BASFY) Stock, BFFAF Stock
BASF SE (BASFY) Discusses Zhanjiang Verbund Site Launch and Strategic Investment in China June 8, 2026 6:00 AM EDT
Company Participants
Stefanie Wettberg – Senior Vice President of Investor Relations
Markus Kamieth – CEO & Chairman of the Board of Executive Directors
Haryono Lim
Stephan Kothrade – CTO & Member of the Board of Executive Directors
Markus Kamieth
CEO & Chairman of the Board of Executive Directors
Yes. Thank you very much, Stefie, and welcome, everybody, to our deep dive on Zhanjiang, a topic that we all have talked about a lot over the last year. So I’m really happy to have a bit of time with you to answer your questions and also introduce the site to you.
We have recently opened Zhanjiang as our seventh Verbund site in BASF globally. And this is the first Verbund site opening since 2005, where we opened the last one in Nanjing, and we’ll talk about this in a second. It is — the Zhanjiang investment marks BASF’s largest single investment globally in our history and the largest investment by a German company in China. At the peak of construction, more than 35,000 people from over 150 companies worked at the site. And as Stefie said, we completed the project on schedule below the original budget and started up the project in line with our expectations.
Now let me take you back a little bit to the history of BASF in China. And BASF has a long history of over 140 years of doing business in China. And we started actually our production in China in 1969 with our first manufacturing site, and that was roughly the time when we started up our — when we opened our Antwerp site in Europe. So we are certainly one of the longest invested chemical companies in China.
Since then, we have consistently increased our presence in Greater China, in line with our local-for-local approach, which we follow already for quite some decades. In 2025, the proportion of sales from local production in Greater China accounted to almost — to around 80%. And we sourced around 90% of the required input factors locally. Today, BASF operates 29 production sites and has 28 major wholly owned companies, and we are partnering in 12 major joint ventures in the country.
Overall, 12,500 employees helped to generate sales of EUR 8.2 billion with customers in Greater China. And please keep in mind that this number EUR 8.2 billion does not include the roughly EUR 2 billion of sales generated by our main joint venture in China, BASF-YPC Company, which is a 50-50 joint venture with Sinopec operating our Nanjing Verbund site, and we consolidate or we account for this participation at equity. So the EUR 8.2 billion sales number does not account for this.
On the slide, you can also see that we have consistently delivered volume and earnings growth in Greater China between 2015 and 2025, so roughly over the last 10 years, sales volumes in Greater China have grown at 6% on a compounded average annual basis and profitability as measured by EBITDA before special items has grown on average 11% per year, and the performance has been stronger than in any other region for BASF.
Now let me turn for a moment to the macroeconomic environment in China’s role in the chemical industry. We overall assume that the chemical production globally will grow at a rate of around 2.8% on per year in the time frame of 2025 to 2030. This growth will be predominantly driven by Greater China, which is expected to grow by 3.7% per year. And if you look at the middle of this chart, I think these are some remarkable numbers. If you look at the share of Greater China’s — of Greater China in the GDP, industrial and chemicals growth. You can see that 1/3 of the global GDP growth, roughly half of global industrial growth and 3/4 of global chemicals demand growth will come from Greater China in this time period.
This growth will be supported by robust domestic demand based on an expanding middle class with rising income and through export-oriented industries. Greater China will — is and will remain the largest chemical market in the world. And already today, accounts for 55% of global chemical production. So I think it’s important for the chemical industry cannot be over exaggerated.
On the next slide, you can see that the absolute growth, if you take this from a relative to an absolute growth perspective, the absolute growth in the chemical market in Greater China is expected to be nearly 3x higher than the rest of the world combined. All other regions will grow as well, at least to our estimates in the time frame, 2025 to 2030. And I think it’s fair to say when you look at these numbers that the growth in China, certainly, will be unmatched by anything else that we see in the rest of the world. And this is why we have decided to invest into a second Verbund site in China.
Now the overall environment also politically is certainly providing us with some confidence that also the next years will be quite successful years for BASF. If you look at the political environment that comes through China’s 15th 5-year plan, you can see that this creates a very favorable framework for companies like BASF. Our local scale, cost competitiveness and especially our innovation strength, foster long-term value creation. In addition, our broad portfolio means that we can grow by creating tailored solutions for our customers.
And we today talk about the big manufacturing site, but let me also remind you that in Shanghai, with our innovation campus, we have over the last 10 years, established a significant. And our second largest innovation center globally for our chemicals activities in China and this in line with our — or in combination with our strong EHS reputation certainly gives us a strong credibility to develop future solutions for our customers in China.
Our strong commitment to sustainability supports the targeted transition of the Chinese economy to a low-carbon and circular economy. And in this regard, the Zhanjiang Verbund site shows what the future of chemistry will look like is a smart integrated Verbund structure on an industrial scale, efficient digital and sustainable by design, and you will see this in more details going forward.
Lastly, let me focus on the location and why we chose to invest this Verbund site in the south of China, namely in the province of Guangdong. Historically, BASF has grown significantly in the east of China. So we had more than 90% of our assets in the area around Shanghai and Jiangsu province. More and more China’s economic growth has moved south and Guangdong is actually as a province today, the powerhouse of the Chinese economy. With nearly 128 million residents, Guangdong is the most populous province in China. And although in terms of GDP, it is the country’s largest province with Jiangsu province, which is home to our Nanjing operations ranking second.
And to put things into perspective, the GDP of Guangdong is roughly equivalent to that of South Korea or Spain. The projected GDP growth of around 4% per year in Guangdong will be driven by industrial investments of important BASF customer industries, such as transportation, consumer goods, home and personal care as well as electronics. And it includes, of course, the strongly growing, let’s say, area or economic zone around the Pearl River Delta, including Macao and Hong Kong.
In a nutshell, Guangdong Province is one of the most — is one of the economic growth engines of China and detects as a powerhouse for BASF’s key customer industries and provides fast-growing demand innovative chemical products and solutions. And until today, Guangdong as a province is a significant net importer of chemical products, and we assume that the strong economic growth in the Guangxi, Guangdong, Fujian and Hainan provinces will at the end of the day, stipulate a strong and successful future of our Verbund site in Zhanjiang.
And with this, I hand over to Hary, and please take us into the journey of the Zhanjiang site.
Haryono Lim
Yes. Thank you very much, Markus. Let me virtually bring you to Zhanjiang and explain to you a little bit about what is so special about the location, Zhanjiang. So the location is exactly on this Donghai Island. This is over excellent geographical advantages. I think thanks to proximity fast-growing industrial centers in Guangdong and the surrounding provinces in South China.
For those of you who have never been to Zhanjiang, so we are located on the western part of Province Guangdong. And today, you can reach us via high-speed rail train from Guangzhou just in 1.5 hours. So our site has direct access to the deep-water seaport. I think this is very important to us to run the Verbund because with the access to the deep seaport and operate our own JP, we are able to bring in large-scale raw material and as well as using the waterway to ship our finished goods to our customers. And the location itself also offers the shortest sea routes between Mainland China and the Southeast Asia market. And in addition, Zhanjiang has a rapidly evolving industrial ecosystem, enabling future synergies with co-location partners and core producers.
Next, I would like to give you some statistic about our site in Zhanjiang. So impressive statistic here. We have a size of full square kilometers, so 400 hectares since we are approaching the World Cup. So it is roughly 550 soccer fields just for you to compare to the soccer field. And as Stefie mentioned at the beginning, in early 2026, we have successfully started up our entire Verbund, including the worldscale flex-feed steam cracker. And as of May, we have started producing and also run successfully 19 of our plants and 33 production lines. And one more plant is coming, and this will be commissioned in 2028. This is the 3-decanol plant. So this is also on schedule. The total investment, as you know, it is an amount of EUR 8.7 million. This is the CapEx that we spend on the period of 2019 to 2028.
And as for the value chain. So we have this Verbund location with the upstream and downstream. So that gives us an advantage to also to manufacture a broad product portfolio. It is not just the cracker or cracker plus 1. We call it, The Cracker Downstream, but we have more products to offer through the integrated approach. We create a value chain for ethylene, propylene, C4.
And after Ludwigshafen and Antwerp Zhanjiang is the third largest Verbund for BASF. And today, we are employing around 2,000 people working at a site as a key platform for the long-term profitable and sustainable growth of BASF in China and Asia, the majority of the products that we produce in Zhanjiang will directly serve customers in China, particularly. And this is fully aligned with BASF local-for-local production approach.
And allow me also to share some key success factors for our Zhanjiang Verbund site. So running such a mega project require high commitment to safety, quality and also compliance. At the peak of our construction site, we have more than 35,000 people working for BASF and more than 150 companies working at our site. So it is UTmost important that we are committed to the safety and the quality of our site, making sure that not only the BASF employees, but also all our partners, they are giving us the same commitment as well.
And also, this is important to make sure that we have a very, very strict discipline in our executions, making sure that the timeline and as well as the CapEx are well under control. And what is also important for us for being a greenfield in China that we are also managing the interfaces with authority [indiscernible] partners extremely well, making sure that any issues that we have identified are also being addressed speedily. And of course, at the end, it is also about the people. So we are very proud that our team has executed this complex tasks with outstanding dedications and speed and exceptional level of commitment.
So this is just a couple of points that I want to highlight to you that summarize what we see as a key pillar for success. And also important is that we have started the recruitment processes very early at the beginning of our project, knowing that to get the right people and to train them and to qualify them to run such an important Verbund for BASF that requires time and also sufficient training for our stuff. But we are fortunate enough that in China, we are operating many sites, especially with our experience in Nanjing, our Verbund site in Nanjing, we are able also to train our colleagues in various production sites in China as well.
So — and I think also what is impressive for us to make a comment here is also about the commissioning and start-up as well. I think running a Verbund is always a complex part. It has a chance if it works. But at the same time, we know that if anything doesn’t fall into phases, may also create a lot of complexity and stress. So I think we are very happy to see that with our comprehensive commissioning plan, so we are able to start up our plants in sequences and achieve steady state operation already today.
So the next slide that I want to introduce to you is also about our Smart Verbund. So this is also a very unique opportunity for BASF for being a greenfield that we are able to bring our vision to life that with the digitalization and innovations, we are able to even get additional synergies, what already the Verbund could deliver. So we apply state-of-the-art digital solutions that are seamlessly integrated and enhanced with big data and artificial intelligence.
To achieve this, we implemented a best-in-class digital infrastructure and are leveraging 5G and cloud services, for example. And also to make this more tangible also, let me have some showcase for some features. So we are trying for our Verbund site to be paperless. We have implemented fully automated real-time integrations, and we have more than 8,000 utility measurements. We have AI-driven automations. If you see today in our site logistics, AI agents already automate 95% of our outbound delivery processes across multiple systems. And also with the help of digitalization. So we are moving from reactive to proactive, digital assistant leverages DSF data, analytics and AI to spot supply disruptions at early stage.
With all that, our Smart Verbund vision has become reality, something that is fascinating for me also as a chemical engineers. But based on this excellent foundation, we will continue to innovate. We are at the right place in China where today, AI, automation, robotics are very much on the front page of our activities. And here, we hope that we will continue making use of this opportunity to drive our Verbund even to more sustainable operation.
The next slide is about our unique cracker setup. Here, I would like to highlight that with the access of the deep seaport that we have, we are able also to bring the key cracker feedstock to our site. But also what is important to highlight here is that in Zhanjiang with our 1 million metric ton of ethylene flex-feed cracker we are able to process quite broad varieties of feedstock like naphtha and butane. And this will allow us to produce key raw material for our value chain, ethylene, propylene, Crude C4 reliably and efficiently.
Furthermore, this setup also allow us to optimize feedstock and to strive to achieve low cost. It is remarkable also that we are driving or utilizing 100% renewable energy today for our entire site. And one big contributor to this success is also the innovation that we apply here for our cracker that we drive the main compressor of our cracker also known as a e-drive, using 100% renewable energy. In conventional cracker, typically, those big compressor turbines are driven by steam generated and using the natural gas and cracker fuel gas.
And also, we make use of the surplus cracker fuel gas and CO2 off-gas produced by downstream plant like ethylene oxide. We are using those fuel gas and CO2 off-gas to produce our syngas, which is again important raw material for our downstream like for the Oxo alcohol. And not only just the — utilizing the e-drives, but we also make sure that the so-called heat integration of our entire site is really at the top notch because with the heat integration, we are able to optimize further our site and reduce the CO2 and therefore, less fossil feedstock to be used compared to other sites.
The next one, I want to give you a little bit of our sustainability journey here in Zhanjiang, especially also to explain to you how we’re able to bring our carbon footprint or reduce our carbon footprint more than half than conventional petrochemical side. So with the Verbund concept, obviously, we have already efficiencies. And what I mentioned before about the heat integrations. So that obviously also contributed to the lower use of the fossil fuel.
And with the e-drive using the 100% of renewable energy for the entire site, obviously, this is all contribute to bring down the CO2 emissions for our site. And how are we able to do that? I think to secure the renewable energies today, we have 3 main sources. One is we have a joint venture with Mingyang for offshore wind farm located 80 kilometers south of Zhanjiang. This is currently under construction and has a planned capacity of 500-megawatt.
And then we have also — the second source is from the Power Purchase Agreement that we have signed with partners like State Power Investment Corporation, SPIC, and GEDI. This is a long-term supply contract for 25 years. And the third one is we also install wherever we can on our site, the solar panels that contribute also to the green energy source for our site.
With this, I would like to hand it over to Stephan.
Stephan Kothrade
CTO & Member of the Board of Executive Directors
Yes. Thank you very much, Hary. I would like to continue with an overview of the value chains and products of the Zhanjiang Verbund site to illustrate a little bit what the differences are between our site and the typical big sites you see in China from our competitors.
First of all, you know we have this Verbund setup, our Verbund production system that makes us more resilient because it’s also less dependent on externally sourced precursors as we produce the vast majority ourselves. It provides us with cost advantages. But it’s also important to highlight here that whilst most of our competitors focus just on 2, 3, 4 major commodity type products such as polyolefins, ethylene glycol or PTA, we have a very diversified product slate here.
Of course, we also produce polyethylene and ethylene glycol. We need these products as scale enablers to achieve economies of scale and cost benefits and also to have more flexibility. But let’s say, the strategically relevant products are more diverse. And let me go through the 3 main value chains, starting with C2, ethylene. So ethylene oxide is a very important raw material for us because we produce surfactants and even precursors for brake fluids on our site.
Last year, during the investor update in Antwerp, we showcased the BASF EO Value Chain just to repeat a little bit. So we are a technology leader and also offer the lowest CO2 footprint with our downstream products because of lower energy consumption and high raw material yield. We also have the best safety technology in the industry. So this is a very strong foundation of this value chain.
When we come to the propylene C3 value chain, this is the basis for our acrylics business, acrylic acid and Oxo alcohols. And these are used to make further products, mainly for the adhesives and coatings industry. And Oxo products are also the feedstock for Specialty Intermediates. One byproduct is isobutyraldehyde that is a basis for neopentyl glycol, an intermediate that I will talk about in a couple of minutes.
And when it comes to the Crude C4 that we get out of our cracker, here, we extract isobutene, which is the starting point of the citral value chain to produce aroma ingredients and vitamins. Now in addition, we also have at the site engineering plastics compounding facilities and plant for thermoplastic polyurethanes, which both serve the automotive and electrical industries in South China, but are also used for sports shoes and sports equipment.
Now building on this product slate, I would like to show you on the next few slides some examples of customer success stories that show how our local-for-local production approach and the breadth of our customer industries works and plays into our hands. And here, it’s also very important to notice what Markus has highlighted that we have a strong R&D footprint in China at our Shanghai campus that allows us to co-create with customers.
And let me start with one example, the partnership with Youyi. You are all familiar, of course, with adhesive tapes from your daily life, but I would bet it most of you haven’t heard a name Youyi. It’s definitely not a household name, but Youyi is a globally leading adhesive tape manufacturer that operates around 20 production sites in China and has a very strong market presence. It’s a vertically integrated player from polypropylene film to the finished tape products. And they are a — have been a partner for us for many, many years. Actually, we started our business with them from our Nanjing Verbund site and now with the Zhanjiang Verbund site in Guangdong. We also follow the production footprint of Youyi because they also build a new large-scale production plant in South China, not far from our Zhanjiang Verbund site.
So from a customer perspective, we offer here a long-term reliable acrylates supply. We talk about butyl acrylate and 2-ethylhexyl acrylate and we reduced the import dependency in South China for these products. And with our leading cost position in acrylics, thanks to our proprietary BASF technology and the favorable cost position offered by the site set up, we are here the partner of choice. So this customer alone purchases the production volumes equivalent to one world-scale butyl acrylate plant every year. And our Zhanjiang Verbund supplies more than 50% of its BA and 2-EHA production to China’s fast-growing adhesives and the tape market, which has a compounded annual growth rate of around 11%. So this was an example from our Petrochemicals division.
Let’s move on to the Intermediates division. And here, we have a success story around neopentyl gycol or NPG that I mentioned already. It’s a key ingredient for powder coatings that are low VOC, low volatile organic compound coatings for a wide variety of applications. ranging from garden furniture to infrastructure elements, for instance, all the big construction parts you see at airports are typically coated with powder coatings.
To capture profitable growth, we have also built a world-scale NPG plant at the Zhanjiang Verbund site. NPG is expected to grow at around 5% per year on a global scale and Asia Pacific is by far the largest market, and it’s also the fastest-growing region with an annual growth rate of around 6%. And now we are again close to our customer. Here, the company KHUA, it’s one of the top ranking producers of the saturated polyester resins that are made with NPG and then used for powder coatings. And we signed an agreement with them to supply them from our new plant.
And again, here, we have the same pattern. We have been, for many years, a strong partner based on our production in Zhanjiang, at the Zhanjiang Verbund site, and now we replicate the success and tap into the market potential in South China. To give you just a number, KHUA recently expanded its production capacity by 150,000 tonnes to almost 400,000 tonnes. So quite a relevant customer for us.
Now we talk about Ultramid and Ultradur, our engineering plastics based on polyamide and PBT. And here, It’s, again, relevant to emphasize the co-creation aspect, co-creation in innovation with customers from our Innovation Campus in Shanghai. We are the — we hold the #1 position in engineering plastics globally, Asia Pacific continues to be our largest and fastest-growing market. And for us, it’s important to penetrate new application segments through innovation. And here, the company Orient Motion, a very dynamic, fast-growing mobility tech start-up from Suzhou in China is a nice example because they are specializing in the next generation by wire systems that replace traditional mechanical components in the automotive industry with electronic control. And we have co-developed here a break by wire pedal system.
You see the pedal on the upper left corner on the slide, on the right side, you see the control units where the mechanical signal is translated, transmitted into an electric signal. So our materials are nonconductive, lightweight, antistatic. It’s about stiffness, mechanical properties, and you have to meet all the sophisticated GB codes. And we developed this system now together with Orient Motion within less than 2 years and brought it now as the first mass-produced electromechanical braking system to the market, benefiting from the innovation appetite of Chinese OEMs that are fast moving here into the electrification of all these systems.
Now let’s talk a little bit also about the expected financial outcome of our investment. We have built a fantastic growth platform that benefits from the Verbund advantages. We have leading cost positions. And we also, as I hope I could show you, we enjoy customer proximity. We benefit from our local R&D capabilities. And as Hary has explained, we are also leading when it comes to sustainability and are well prepared for the green transformation in China.
So what we expect is that by 2030, we will achieve sales of between EUR 4 million and EUR 5 billion from the Zhanjiang Verbund site, this is roughly equivalent to around 10% of the current sales in our core businesses. The EBITDA is expected to reach between EUR 1 billion and EUR 1.2 billion by 2030. For ’26, however, we have said this before, we anticipate still a slightly negative EBITDA. This has to do with the start-up cost with the fact that we are still further optimizing the infrastructure utilities to the sweet spot. So all this will come during the course of the year. And then the key inflection point is expected in 2027 when the site reaches full capacity utilization, the start-up costs phase out and the optimization measures begin to take effect. So against this backdrop, we clearly expect the site to contribute positively to EBITDA from 2027 onwards.
Christian Faitz
Kepler Cheuvreux, Research Division
Two questions, please. First of all, how certain can you be of the expected still overproportionate growth of the Chinese market into 2030 as you elucidated on Slide 5 of your presentation. I mean for one, China is already more than 40% of global chemical markets. And according to our data, you just cited apparently even more than 50%. And some geopolitical factors have necessarily changed over the past 18 months or so, Liberation Day, Iran conflict, et cetera, just to name the most important ones. So would this mean a shift away from China, at least in terms of growth? Or what is your perspective there?
My second question, as we have the opportunity to talk to you, Markus, as CEO in the last month of Q2, would you mind providing us with the trading update of the key trends you have observed so far in Q2. Are chemical customers, for example, still panic buying as they are afraid that logistics globally might be more challenging going forward? And how do you assess underlying demand in your key customer industries?
Markus Kamieth
CEO & Chairman of the Board of Executive Directors
Yes. Thanks, Christian. Markus here. I will try to take both questions, starting with the first one. Of course, these are projections, but please also look at the time frame that we have also taken here, we are not speculating now for the next 15 or 20 years. This is really an outlook for 2025 until 2030. So it’s fairly certain. And I would say, also is very much in line with what we are observing already in 2026.
As you know, chemical market growth has in China been significantly above 5% last year in 2025 and also continues this year with a very strong demand. Now short term, this is certainly overproportionately driven by export growth of customer industries, but we still believe that there is a robust domestic demand developing also in China. And this is also, I think, from our perspective, at least underlined by a solid fundamental, let’s say, policy directions in China. So short term, until 2030, I think we’re fairly certain that this picture is valid. And it, of course, is also particularly impressive in comparison to the rest of the world where we do not see any chemical demand growth, and this is particularly due to the weakness that we are seeing in customer industries in Europe and in North America.
So yes, China looks a little bit better relative to other regions. But in general, the short-term outlook from our perspective is at least fairly robust, plus/minus the usual ups and downs, but China has, again, in the Iran conflict from my perspective, at least proven its resiliency when it comes to industrial value chains. China has, let’s say, reacted or has been affected much less than people have predicted in early March.
Second question on Q2, let’s say, current trading, I have not seen the May results, I have to say. But based on what I’ve seen in terms of volume development, I can say that the short term spike that we have seen when it comes to volume, especially in March, slightly lower than in April is somewhat normalizing. So May looks more like April than it looks like March. So this is what you call panic buying, I would say, this was certainly a certain insecurity in value chains in particular, in Europe, that is somewhat tailing off. But what we continue to see is a rather robust price development when it goes — when you compare April, May, we still see some areas where pricing has even strengthened.
So overall, I would say, May looks like a continuation of a fairly strong April. So we expect that in Q2, we should be able to come in around analyst expectations given the current dynamics. But of course, we have to wait until June is in. We see somewhat of a, let’s say, overall normalization, so no big hectic effects, but the inflation overall is, of course, not going away within security in Iran not tailing off.
Stephan Kothrade
CTO & Member of the Board of Executive Directors
We have always brought the latest technology to China. We did this at the Nanjing Verbund site, we did it at our sites in the Greater Shanghai area with the MDI asset we built in Chongqing, and this is paying off. It’s a combination of the technologies we bring, but it’s also the way how we operate the sites. And here, you can always make a difference. And this now brings me to this aspect of your question where you’re asking, what do all the data and the digitalization and AI tools really help you in terms of achieving a cost advantage.
The point is at the end of the day, when you invest, it’s important that your plants really run 24/7, 365 days a year. You don’t want to have any hiccups. Any unwanted unplanned shutdowns. You want to be always back on track as soon as possible. And here, we can see when we compare to peers, but also when we compare BASF internally that our asset park in China shows the best performance globally. And I’m pretty sure that now with the newest technologies and what we built in Zhanjiang, this will even set new benchmarks over time when we advance on the learning curve.
Now comparing this between different regions is difficult because you have a different raw material base, you have different partners across the fence. But what I can say is, if you look now into the cost position of some of our key products like acrylic acid or butyl acrylate that I mentioned or NPG, products where already today, we are extremely cost competitive in China. Now if we compare the new plants in Zhanjiang with the assets in Nanjing, I can say this is, again, a further reduction in cash cost position. So we are very much to the left side. And in the example that I’m just mentioning, the cost leader in the Chinese producer landscape. So this will pay off over time and really further improves our position in key value chains of BASF.
Markus Kamieth
CEO & Chairman of the Board of Executive Directors
And last point maybe, Chetan, what’s always important is, for us, is the cost position in the region that our assets are in. So comparing now the absolute, let’s say, cost of goods sold of Zhanjiang to Ludwigshafen to Geismar is not so relevant because most of our products actually do not travel so much. So we’re not a polyethylene producer where you are moving your assets to the lowest feedstock region and then distribute from there to the world.
But our products that you’ve seen in Stephan’s presentation are typically in the region for the region, and this is why you have to be competitive where you are. So for us, for example, despite the fact that we might have lower cost because we have newer assets in Zhanjiang for certain of our products, we would not — it would not make sense for us to ship them from Zhanjiang to Europe because we have also very competitive assets here in Ludwigshafen even if they are older. So for us, the competitiveness in the respective markets is much more relevant. And that’s why you heard us often talk so much about the relative cash cost position in China.
Stephan Kothrade
CTO & Member of the Board of Executive Directors
Yes. India is definitely an interesting market. We have defined India as 1 of the 7 advanced countries in our winning ways strategy because we see that there is now more and more investment into industrial production, into manufacturing, which translates into demand in our customer industries. So the size of the Indian chemical market is becoming more relevant. But you also have to take into account that if you compare the Indian chemical market to the Chinese chemical market, there is a difference of a factor of 15, 1-5. So I would also say the Indian chemical market fits into one larger Chinese province. But nevertheless, it’s fast growing. It’s interesting.
But coming to one aspect of your question. India is definitely not a platform to produce chemicals or plastics for export. So if we look into opportunities in India, it’s for the domestic market. We would need a very competitive setup in one of our key value chains. It’s something we are considering, but we are not in a rush.
We are not in a need to do anything at this and you also know our guidance when it comes to CapEx. We want to stay below depreciation levels. So yes, there’s opportunities. We will always look into opportunities in India, but it’s too early now to come to a decision point or to make any announcements at this stage.
Markus Kamieth
CEO & Chairman of the Board of Executive Directors
Yes, Sebastian, I think your question was also whether we are supplying maybe India from Zhanjiang. That is certainly not the intent. But as Stephan said, we believe in India, we believe India is a very promising market for chemicals in the next decade. So we are thinking about investment oppurtunities also in India because I don’t believe that at the end, you can be long term successful by importing products into India. But we’re doing this, of course, right now, successfully, for example, also from our Southeast Asian Verbund in Kuantan. But also from Europe, we are importing into India now with the new free trade agreement with India that even is more competitive. So overall, we are preparing India for the next growth phase, but we have nothing imminent yet, but we believe in strong local chemical production in India for the next decade.
June 2, 2026
Berkshire Investing in New Home Construction
Berkshire Buys Taylor Morrison For $6.8 Billion In First Big Deal Under Greg Abel
by Tyler Durden
Sunday, May 31, 2026 – 05:40 PM
Less than a month after we mused at Berkshire’s most recent cash hoard which as of March 31 stood just shy of $400 billion, and wondered who Warren Buffett’s replacement Greg Abel will acquire first…
… we got the answer on Sunday afternoon, when Berkshire announced it will acquire homebuilder Taylor Morrison Home Corp. in an all-cash deal worth about $6.8 billion. Which means that after the deal, Berkshire still has $390 billion in T-bills collecting about 3.5%.
The offer of $72.50 per common share represents a 24% premium to the home builder’s latest closing price on Friday. The deal is expected to close in the second half of this year.
Taylor Morrison is one of the largest community developers and homebuilders in the US and also offers financial services like home loans, titles, escrow and insurance to consumers, according to the statement. The firm has more than 350 communities across 12 states. The existing Taylor Morrison management team, including Chief Executive Officer Sheryl Palmer, will continue to lead the firm, according to the statement.
“We are excited to welcome Taylor Morrison into Berkshire’s portfolio,” Greg Abel, chief executive officer of Berkshire Hathaway, said in a statement Sunday. “Over time, we expect to unify our site-built homebuilding operations into a combined platform enabling us to deliver the dream of homeownership to more Americans.”
This is the first multibillion-dollar acquisition under Abel, who took over Berkshire Hathaway earlier this year after Warren Buffett retired last year. While investors have been satisfied with Abel’s command over the sprawling conglomerate, some have been hoping that a deal could support Berkshire’s shares, which fell 5.6% so far this year, largely due to Berkshire’s lack of exposure to the AI bubble. The S&P 500 index gained 10.7% in the same period.
It is unclear if the deal signals that Abel believes the bottom for the US housing market is coming, or if Berkshire is buying a homebuilder during a brutal housing labor shortage, giving companies like Taylor Morrison operating leverage despite sky high mortgage rates. In any case, while millions of Americans have been hoping and praying that 8% mortgage will crash the housing market – which has never been more unaffordable – and allow them to enter at lower price, the investor with the biggest cash pile in history just bought a builder outright with cash from under the rug, as a three million home supply deficit clearly overrides the soaring cost of capital.
May 17, 2026
Stepan Announces Price Increases
Stepan Company Announces Polyol Price Increase for North America effective July 1, 2026
Northbrook, IL, May 15, 2026 – Effective July 1, 2026, or as contracts allow, Stepan will increase the price for
STEPANPOL ® and TERATE ® Rigid Polyester Polyols used in the Americas by $0.185 per pound.
This increase is addition
to the price announcement effective May 15 th , 2026. This increase is necessary due to the continued escalation in raw
material prices, freight and energy costs.
www.stepan.com
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