BASF Braces for a Double Squeeze: Geopolitical Supply Shock Meets a Radical Cost Overhaul
14.06.2026 - 13:05:11 | boerse-global.de
Markus Kamieth, BASF’s chief executive, delivered a blunt assessment of the second half of 2025 during a Frankfurt press gathering on 9 June. The chemical giant is staring down a potential material crisis as tensions between the US, Israel and Iran threaten to choke the Strait of Hormuz — a chokepoint that handles roughly 20% of the world’s crude oil and as much as 40% of refined products such as fuels and petrochemical feedstocks. A sustained closure would send Brent crude, already trading near $100 a barrel, even higher and inflict direct margin pain on a company that relies heavily on imported raw materials. Kamieth warned that supply chains for essentials like sulphur and helium are already tight, and that automakers including Volkswagen and Mercedes-Benz are flagging the risk of production stoppages.
The CEO was equally dismissive of any quick fix from cheaper European gas. Reviving the Nordstream pipeline, he argued, would not depress prices because the continent’s benchmark is now determined by liquefied natural gas, not pipeline flows. Carbon dioxide levies further inflate the cost of energy-intensive processes such as ammonia production, leaving BASF’s European operations structurally disadvantaged. Despite this, Kamieth insisted that Europe will still host a competitive chemical industry a decade from now — albeit one that looks very different.
Against that external headwind, the management is pushing through its most ambitious internal restructuring in years. The newly unveiled “CoreShift” programme targets a 20% reduction in fixed operating costs within the core business by 2029, using 2024 as the baseline. Further job cuts are baked into the plan, though the company has not yet specified numbers. The initiative is being overseen by a dedicated “Core Transformation Office” led by Julia Raquet, operating under the strategic banner “Winning Ways.” At the same time, BASF is shedding non-core assets: the silicate business, including the Düsseldorf/Holthausen site, is being sold to US group PQ, with a closing expected in the second half of 2026. The agricultural chemicals division remains on track for an initial public offering in 2027.
Should investors sell immediately? Or is it worth buying BASF?
One bright spot, albeit one that will take years to mature, is the new Verbund site in Zhanjiang, China. Production has already started, but ramp-up costs will likely push the complex’s EBITDA into slightly negative territory in 2026. The inflection point is pencilled in for 2027, when full capacity utilisation is targeted, and by 2030 BASF expects Zhanjiang to generate annual revenue of €4 billion to €5 billion and EBITDA of €1 billion to €1.2 billion. The project is a central pillar of the group’s long-term bet on Asian demand.
Investors, however, are focused on the near-term risks. BASF’s stock closed at €49.35 on Friday, roughly 5% below its 50-day moving average of €52.14. The shares have shed nearly 9% over the past month, yet they still hold a year-to-date gain of about 10%. Analysts see fair value at an average of €53, with the most bullish forecast reaching €65. The group has kept its full-year guidance unchanged: operating earnings before special items should land between €6.2 billion and €7.0 billion.
The first real test will come in July with the release of second-quarter results, when investors will look for proof that the cost cuts are already supporting margins. But the dominant force for the stock in the near term is likely to be the situation in the Strait of Hormuz. If the conflict does not de-escalate, the margin squeeze will persist — and so will the pressure on BASF’s share price.
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BASF Stock: New Analysis - 14 June
Fresh BASF information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
