BA BASFY BASF SE S/ADR Loading... : Bullish and Bearish Analyst Opinions

"Steel will never be I think truly competitive in Europe again and chemicals particularly petrochemicals... Europe is not a doesn't have a comparative advantage in producing this stuff and it is going to move elsewhere." European heavy industry relies heavily on imported energy. Without cheap Russian gas or abundant domestic fossil fuels, European steelmakers (like ArcelorMittal) and chemical giants (like BASF) face structurally higher input costs than their global peers. This will lead to permanent margin compression, forced capacity shutdowns, and costly relocations. SHORT (or AVOID) European heavy industrials, specifically in the steel and petrochemical sectors, as their core geographic footprint is fundamentally uncompetitive in the new global energy reality. European governments could implement massive, sustained subsidies or strict protectionist tariffs (like the Carbon Border Adjustment Mechanism) that artificially prop up domestic heavy industry margins.

Expect neutral performance from BASF as the company guides for flat earnings amidst a challenging market, suggesting limited upside.