Back in August, the blog noted that BASF chairman Jurgen Hambrecht was forecasting that “the world will still continue to grow respectably”, although he foresaw a temporary slowdown into H1 2009. Yesterday, however, this mood of relative optimism had disappeared as BASF announced Q3 results.
Hambrecht is now forecasting, along with Dow’s Andrew Liveris, that “the decline in demand in important markets, stockpiling by our customers and the fall in oil prices are all signs of a recessionary trend that is likely to sharpen in 2009.”
Compounding current problems, BASF reported it had suffered “significant expenses from hedging naphtha purchases against increasing prices” in Q3. Sadly, it seems BASF had failed to take the blog’s advice on July 13 to also hedge against a rapid fall in crude prices to $100/bbl.