BASF's $1 Billion Louisiana Bet Lands Alongside a Broker Downgrade and a Pushback on Brussels

BASF brought its new MDI production facility at the Geismar integrated site in Louisiana into official service on Wednesday, a project carrying an investment of roughly $1 billion and lifting annual MDI capacity there to about 600,000 tonnes. The German chemicals group described the undertaking as its largest single investment in the United States.

The start-up caps a busy stretch for the Ludwigshafen-based company, which has spent the same week reshaping its portfolio, defending its position on European carbon rules and absorbing a more cautious view from the sell side.

Portfolio pruning on several fronts

On Tuesday, BASF said it had agreed to sell its global mining solutions business to SNF. The package includes the Cork production site and roughly 140 employees. Completion is targeted for 2027, subject to regulatory approvals and further conditions. No purchase price was disclosed.

That deal followed the signing on 6 November of an agreement under which ALTA Performance Materials will take over BASF's Palatal business in Chile, including the Concón production site. That transaction also hinges on customary conditions and antitrust clearances.

Earlier in the week, BASF and S&J International Enterprises signed a memorandum of understanding to explore a possible strategic collaboration in sun protection products. Separately, the company obtained FairWild certification for Cegesoft SB 45 TR, a shea butter-based ingredient.

Green power for polyisobutene

BASF also announced on Tuesday that it will produce suitable European Oppanol B and Glissopal grades for external customers entirely with renewable electricity from January 2027. The switch covers the relevant polyisobutene output, and the company said product specifications and article numbers will remain unchanged.

Chiefs take aim at CO? conditions

Chief executive Markus Kamieth, together with Covestro CEO Markus Steilemann, has come out against a planned conditioning of free CO? allowances. According to Handelsblatt, the two executives argued their case in a joint letter objecting to the proposed requirements. The same newspaper reported a warning from the German chemicals association VCI about a weak economy and rising gas prices.

Jefferies turns bearish

Jefferies downgraded BASF from "Hold" to "Underperform" on Wednesday while keeping its price target at EUR 44. Analyst Priyanka Patel pointed to shrinking margins, persistent overcapacity, higher gas prices and a lack of any demand recovery. She sees BASF's operating result for 2027 coming in 5 percent below consensus.

The downgrade lands as the company balances heavy investment in US capacity against a European backdrop of sluggish demand and energy costs that continue to weigh on the sector.