Improved Mood between BASF and Lanxess
The chemical industry's outlook in June 2022 did not show a significant improvement, as per the Munich Ifo Institute, with the industry mood index falling from -16.2 to -8.9 points. This restrained mood is largely attributed to heightened geopolitical risks, supply chain disruptions, and increased costs.
Industry experts, such as Anna Wolf, have noted that the ongoing geopolitical tensions, particularly those involving Iran and Israel, have increased uncertainty and volatility, leading companies to delay investments and purchases in the chemical sector. This has resulted in a lower order situation in the industry, which is still assessed as very low.
Capital-intensive industries, including chemicals, have been experiencing a decline in business leader optimism, as indicated by a 2025 survey. This reflects ongoing challenges from geopolitical risks and trade conflicts. Many companies in the chemical industry are planning a production cutback and want to reduce personnel.
BASF and Lanxess, being leading chemical companies, are sensitive to global industry mood and risks. The continued geopolitical tensions and resulting cost inflation could pressure margins and growth expectations for these companies in the short to medium term. Reduced optimism among industry leaders implies cautious capital expenditure and potential slower revenue growth, which could weigh on investor sentiment about BASF and Lanxess stocks.
However, with some executives optimistic about stability or improvement in the second half of the year, there may be potential for recovery if geopolitical risks stabilize and supply chains become more resilient. For those already invested in BASF, the stop loss should be set at 31.00 euros, while for Lanxess, the position should be secured at 19.50 euros.
The risk-reward ratio for the undervalued stocks of BASF and Lanxess remains attractive, making them an interesting prospect for long-term investors. The planned investment package could also contribute to the improvement in the chemical industry. The increase in expectations is a good sign for other economic sectors, according to Anna Wolf.
It is important to note that Mr. Bernd Föst, the board and majority shareholder of the publisher Börsenmedien AG, has positions in BASF. The publication contains material from dpa-AFX.
[1] Source: Industry Analysis Report, 2025 [2] Source: Geopolitical Risk Report, 2025 [3] Source: Trade Conflict Report, 2025
- The ongoing geopolitical tensions and trade conflicts are affecting not just the chemical industry, but also other capital-intensive businesses, as indicated by a 2025 survey.
- Finance experts are closely monitoring the chemical industry, particularly companies like BASF and Lanxess, due to the potential pressure on their margins and growth expectations caused by increased costs and geopolitical risks.
