Chemical Industry Collapse - BASF Is The Bellweather
Macro
German industry in freefall - ESI Lower & PMIs lower.
Consumer confidence lower, the chemical industry relies heavily on consumer products.
China PMIs lower again.
Micro
60% of sales are based in China/Europe new orders slowing
"In China, the world’s largest automotive market, the decrease was more than twice as high, at around 13%."
Profit warning 30% revision.
The strategy has been to move into Asian markets but they are all contracting.
If the share price is higher than December 2018 and Germany is going into recession, how is the current price justified?
"Basf predicts a slower year For 2019, we expect the global economy to continue to grow at a
slightly slower pace than in the previous year. "
German industry in freefall - ESI Lower & PMIs lower.
Consumer confidence lower, the chemical industry relies heavily on consumer products.
China PMIs lower again.
Micro
60% of sales are based in China/Europe new orders slowing
"In China, the world’s largest automotive market, the decrease was more than twice as high, at around 13%."
Profit warning 30% revision.
The strategy has been to move into Asian markets but they are all contracting.
If the share price is higher than December 2018 and Germany is going into recession, how is the current price justified?
"Basf predicts a slower year For 2019, we expect the global economy to continue to grow at a
slightly slower pace than in the previous year. "
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