Basic Materials Roundup: Market Talk

The latest Market Talks covering Basic Materials. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

0546 ET – BASF has a long road ahead and large portions of its energy-intense production footprint in Europe face structural challenges to earnings, Jefferies analysts say in a research note. BASF will likely continue to operate at suboptimal utilization rates in Europe, where it faces lower demand, competition from lower-cost Chinese imports and high energy prices, Jefferies says. A problem, the analysts say, is that “any material improvement in end market demand is likely to be met with an increase in European gas prices – which would further pressure its cost position.” More plant closures are likely across the continent, Jefferies says, which downgrades its rating on the German chemical company to underperform and cuts its target price to EUR39 from EUR42. Shares trade 1.9% lower to EUR44.16. (pierre.bertrand@wsj.com)