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BASF to Halt Adipic Acid and Chemical Production at Ludwigshafen
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BASF SE (BASFY - Free Report) announced the cessation of production for adipic acid, cyclododecanone (CDon) and cyclopentanone (CPon) at its Ludwigshafen site. The production facilities for CDon and CPon are scheduled to shut down in the first half of 2025, while the remaining adipic acid production at the site will be discontinued later in the same year.
This decision is part of BASF's ongoing strategic review of its production setup at Ludwigshafen to maintain competitiveness amid evolving market conditions.
BASF had already reduced the production capacity for adipic acid as part of adjustments to the Verbund structures at Ludwigshafen, announced in February 2023. The remaining adipic acid production continued partially to ensure the supply of raw materials for CDon and CPon production. BASF plans to coordinate with customers to manage the cessation of CDon and CPon deliveries.
Approximately 180 employees will be impacted by these plant closures. BASF is committed to assisting affected employees in finding new employment opportunities within the BASF Group.
The company further explained that these closures are part of a long-term strategy aimed at transforming the Ludwigshafen site.
BASF’s Efforts to Improve Profitability
BASFY stated that this decision is essential to maintain profitability across the Verbund value chains by adjusting production structures to align with the evolving market landscape. It will work closely with customers to minimize the impact of these closures. Adipic acid production will continue at BASF's facilities in Onsan, South Korea and through a joint venture in Chalampé, France.
CDon is a key raw material for producing lauryl lactam, a precursor for the high-performance plastic polyamide 12 (PA 12). It is also utilized in the synthesis of musk fragrances and UV stabilizers. CPon serves as a building block for synthesizing crop protection agents and active pharmaceutical ingredients, as a solvent in semiconductor manufacturing and as a precursor in the production of special fragrances. Adipic acid is used in the production of polyamides, polyurethanes, coatings and adhesives, among other applications.
BASF’s Price Performance
In the past year, the stock has inched up 0.8% against the industry’s 8.1% fall in the same period.
The Zacks Consensus Estimate for Newmont’s current-year earnings is pegged at $2.82 per share, indicating a rise of 75% from the year-ago levels. The consensus mark for NEM’s earnings has increased 14% in the past 60 days.The stock has gained nearly 35.8% in the past year.
The Zacks Consensus Estimate for CRS’ current-year earnings is pegged at $6.06 per share, indicating a rise of 27.9% from the year-ago levels. CRS’ earnings beat the consensus estimate in each of the last four quarters, the average earnings surprise being 15.9%. The stock has rallied nearly 125% in the past year.
The Zacks Consensus Estimate for Eldorado Gold’s current year earnings is pegged at $1.35 per share, indicating a year-over-year rise of 136.8%. EGO beat the consensus estimate in each of the last four quarters, with the average surprise being 430.3%. The company's shares have surged nearly 80.4% in the past year.
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BASF to Halt Adipic Acid and Chemical Production at Ludwigshafen
BASF SE (BASFY - Free Report) announced the cessation of production for adipic acid, cyclododecanone (CDon) and cyclopentanone (CPon) at its Ludwigshafen site. The production facilities for CDon and CPon are scheduled to shut down in the first half of 2025, while the remaining adipic acid production at the site will be discontinued later in the same year.
This decision is part of BASF's ongoing strategic review of its production setup at Ludwigshafen to maintain competitiveness amid evolving market conditions.
BASF SE Price and Consensus
BASF SE price-consensus-chart | BASF SE Quote
BASF’s Strategic Actions for Ludwigshafen Site
BASF had already reduced the production capacity for adipic acid as part of adjustments to the Verbund structures at Ludwigshafen, announced in February 2023. The remaining adipic acid production continued partially to ensure the supply of raw materials for CDon and CPon production. BASF plans to coordinate with customers to manage the cessation of CDon and CPon deliveries.
Approximately 180 employees will be impacted by these plant closures. BASF is committed to assisting affected employees in finding new employment opportunities within the BASF Group.
The company further explained that these closures are part of a long-term strategy aimed at transforming the Ludwigshafen site.
BASF’s Efforts to Improve Profitability
BASFY stated that this decision is essential to maintain profitability across the Verbund value chains by adjusting production structures to align with the evolving market landscape. It will work closely with customers to minimize the impact of these closures. Adipic acid production will continue at BASF's facilities in Onsan, South Korea and through a joint venture in Chalampé, France.
CDon is a key raw material for producing lauryl lactam, a precursor for the high-performance plastic polyamide 12 (PA 12). It is also utilized in the synthesis of musk fragrances and UV stabilizers. CPon serves as a building block for synthesizing crop protection agents and active pharmaceutical ingredients, as a solvent in semiconductor manufacturing and as a precursor in the production of special fragrances. Adipic acid is used in the production of polyamides, polyurethanes, coatings and adhesives, among other applications.
BASF’s Price Performance
In the past year, the stock has inched up 0.8% against the industry’s 8.1% fall in the same period.
Image Source: Zacks Investment Research
BASF’s Zacks Rank & Key Picks
BASF currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Newmont Corporation (NEM - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Eldorado Gold Corporation (EGO - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Newmont’s current-year earnings is pegged at $2.82 per share, indicating a rise of 75% from the year-ago levels. The consensus mark for NEM’s earnings has increased 14% in the past 60 days.The stock has gained nearly 35.8% in the past year.
The Zacks Consensus Estimate for CRS’ current-year earnings is pegged at $6.06 per share, indicating a rise of 27.9% from the year-ago levels. CRS’ earnings beat the consensus estimate in each of the last four quarters, the average earnings surprise being 15.9%. The stock has rallied nearly 125% in the past year.
The Zacks Consensus Estimate for Eldorado Gold’s current year earnings is pegged at $1.35 per share, indicating a year-over-year rise of 136.8%. EGO beat the consensus estimate in each of the last four quarters, with the average surprise being 430.3%. The company's shares have surged nearly 80.4% in the past year.