Urethane Related Comments from BASF Earnings Report
Compared with the first quarter of 2016, sales in the Monomers division increased considerably. This was mainly the result of higher prices, especially for isocyanates. Sales volumes rose sharply, primarily for isocyanates and polyamides. EBIT before special items grew considerably as a consequence of increased margins. Earnings were also positively influenced by the restructuring of our caprolactam production in Europe. Predominantly on account of maintenance measures, fixed costs were higher than in the previous first quarter.
Sales in the Intermediates division also rose considerably year-on-year, mostly through substantial volumes growth in all regions and product lines. Overall, sales prices matched the level of the previous first quarter. EBIT before special items fell considerably, largely dampened by higher fixed costs arising from the startup of new facilities in all regions as well as from shutdowns. The ongoing intensely competitive environment and increased raw material prices both weighed down margins, especially for butanediol and derivatives.
In the Performance Materials division, sales were considerably above the level of the first quarter of 2016. This was mostly the result of higher sales volumes arising from stronger demand from both the automotive industry and the consumer goods sector in Europe and Asia. In Asia, volumes also increased to the construction sector; higher demand in North America came from the automotive industry in particular. Worldwide, business development was especially positive for polyurethane systems, engineering plastics, thermoplastic polyurethanes and styrene foams. Rising raw material prices led to sales price increases; currency effects, too, helped support sales development. Year-on-year, we slightly raised EBIT before special items as a result of this volumes growth.
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