BASF's net profit plummeted by 81%: the dilemma of chemical giants under the energy crisis and tariff storm 2025 is undoubtedly a challenging year for the global chemical industry. As a global chemical giant, BASF's recently released financial report forecast shows that its net profit plummeted by 81% year-on-year to only 80 million euros, far lower than 430 million euros in the same period last year. This data not only reflects BASF's own operating difficulties, but also reflects the collective "bleeding" of the European chemical industry under multiple pressures such as high energy costs, geopolitical turmoil and weak market demand.
The double blow of energy costs and tariffs BASF's dilemma is not an isolated case. The European chemical industry is facing an unprecedented energy crisis, and the soaring prices of natural gas and electricity have directly pushed up production costs. At the same time, the United States announced a 30% tariff on EU exports to the United States. This policy is like a heavy punch, further squeezing the profit space of European chemical companies. BASF clearly pointed out in its financial report that the sharp depreciation of the US dollar against the euro and the market uncertainty caused by tariffs were the main reasons for its EBITDA (earnings before interest, taxes, depreciation and amortization) to be lowered from the expected 8 billion to 8.4 billion euros to 7.3 billion to 7.7 billion euros.
"Ice and fire" of business segments From the perspective of segmented businesses, BASF's performance showed a clear trend of differentiation. The agricultural solutions division performed well and achieved substantial growth; the surface technology and nutrition and care divisions improved slightly; while the materials division declined slightly. The real drag on the overall performance was the chemicals and industrial solutions divisions, which performed much worse than the same period last year, becoming the main reason for the plunge in net profit. In addition, the reduced contribution of equity investments and the increased tax burden further exacerbated the decline in profits.
Survival by cutting off arms: asset sales and strategic adjustments In response to the crisis, BASF launched a series of asset sales plans in 2025, including the Brazilian decorative coatings business, Nordlicht wind farm equity, Styrodur? XPS insulation materials business and global coatings business (still in progress). These measures are aimed at optimizing the asset structure and recovering funds, but they also bring pain in the short term. At the same time, BASF has not given up on its future layout. Chairman of the Group's Executive Board, Kelly, has recently visited China intensively and met with Shanghai Municipal Party Committee Secretary Chen Jining and Vice Premier He Lifeng, and made it clear that he would increase investment in the Chinese market. At present, BASF has formed a strategic layout in China with Shanghai, Nanjing, Chongqing and Zhanjiang as the core, and the Chinese market is regarded as a key engine for its future growth.
The "safe haven" effect of the Chinese market BASF's case clearly shows that the importance of the Chinese market has become increasingly prominent against the backdrop of structural challenges facing the global chemical industry. European chemical companies are seeking a way out by shrinking their local businesses and increasing their investment in the Asian market. For BASF, although the pain of a sharp drop in net profit in the short term is unavoidable, its strategic layout in China may lay the groundwork for future recovery. For the entire industry, how to find a balance between energy transformation, geopolitics and market fluctuations will be the core issue in the next few years.
