Chemicals

Q2 2019

In the Chemicals segment, sales were considerably lower than in the second quarter of 2018, especially in the Petrochemicals division. Sales also declined considerably in the Intermediates division.

Sales development was mainly driven by significantly lower volumes in the Petrochemicals division as a result of the scheduled turnarounds of our steam crackers in Antwerp, Belgium, and Port Arthur, Texas. Sales volumes also declined considerably in the Intermediates division, especially in the businesses serving the automotive, coatings, textile and wind turbine industries. Price levels in both divisions were likewise significantly lower than in the prior-year quarter. In the Petrochemicals division, prices declined for styrene monomers, ethylene glycols and steam cracker products in particular. In the Intermediates division, prices were considerably lower for acids and polyalcohols, among other products. Positive currency effects had a slight offsetting effect in both divisions.

Income from operations (EBIT) before special items decreased considerably compared with the second quarter of 2018 in both divisions, but especially in the Petrochemicals division. Contributing factors included the turnarounds of our steam crackers. Margins also declined, in particular for steam cracker products in North America as well as for ethylene glycols in Europe and Asia Pacific due to high product availability on the market. In addition, we had received an insurance refund in the prior-year quarter. Fixed costs were negatively impacted by currency effects. EBIT before special items in the Intermediates division declined as a result of lower margins and volumes.

EBIT includes a special charge from the impairment of a natural gas-based investment on the U.S. Gulf Coast, which BASF is no longer pursuing.