BASF Leverages Supply Squeeze as China Leadership Handover Looms

BASF raises prices 20-30% amid Asian supply disruptions. Haryono Lim takes over China. Q1 earnings rise to €1.06, but RSI 78.7 overbought.

The German chemicals giant is squeezing a rare window of pricing power from disrupted supply chains, even as it prepares for a leadership change in its most important growth market. Unlike the broad cyclical recovery that the industry has been waiting for, BASF's current advantage stems from something more fragile: tight capacity and temporary shortages.

Haryono Lim will take over as President and Chairman of BASF Greater China from July 1, replacing Dr. Jeffrey Jianfeng Lou, who is leaving the company. The move comes at a time when the Ludwigshafen-based group is extracting steep price increases across several product lines. Reports indicate additives are being marked up by around 25%, amines by 30% and pharmaceutical auxiliaries by 20%.

The trigger is a wave of force majeure declarations across Asia, which the German chemicals association VCI describes as the most severe since the start of the Ukraine war. As supplies of cyclohexane, glycols and amines tighten, European producers with available capacity are gaining the upper hand in negotiations. BASF, with its integrated production base in Germany, is well placed to exploit this shift.

Butadiene, a key building block in multiple chemical value chains, has become a particular margin driver. The company also benefits from easing import pressure from China, though Chief Executive Markus Kamieth has described this as temporary since March. "We're seeing a window to stabilise margins, but the structural headwinds haven't gone away," one analyst noted. Peers such as Lanxess and Evonik have also reported improved demand momentum since spring, pointing to a broader, if fragile, recovery.

On the operational front, BASF's coatings division in Münster has broken ground on an energy project that includes expanding photovoltaic capacity, installing a new substation and integrating battery storage systems. The aim is to quadruple the site's power output while cutting CO? emissions.

The share price remains a mixed picture. After closing at €51.41 on Tuesday — up 0.5% on the day — the stock is still 5.25% lower over the past 30 days, though it has gained nearly 15% year to date. The relative strength index stands at 78.7, signalling overbought conditions. The 52-week high of €54.70 is roughly 6% away.

The buyback programme continues to provide support. Between May 18 and May 22, BASF repurchased 1,568,571 of its own shares at volume-weighted average prices ranging from €51.73 to €52.88. Since the programme began in November 2025, total repurchases have reached 26,885,549 shares.

First-quarter 2026 earnings rose to €1.06 per share from €0.91 a year earlier, on revenue of €16.02 billion. Yet the economic backdrop remains challenging. In Austria, the chemical industry is facing warning strikes in the coming days, with employers pointing to competitive pressure from Germany.

For BASF, the immediate test lies in whether customers will continue to absorb the higher prices and whether supply tightness persists. If Chinese exports resume in force or supply chains normalise faster than expected, the pricing leverage will quickly evaporate.