Surging 51-fold! BASF and Dow deliver Q2 financial turnarounds—among global chemical companies pursuing ‘slimming down and upgrading quality,’ who are the top performers?

BASF improved its investment-side metrics solely by generating €5.6 billion in net cash flow from the sale of its coatings business; however, its free cash flow turned negative, and pressure on day-to-day operational funding became markedly higher than Dow’s—reflecting a widespread pain point among European chemical enterprises: rigidly high energy and raw material costs, coupled with weaker capital turnover efficiency compared to North American ethane-route producers. 3. Regional Cost-Base Differences: The North American Ethane Route Dominates the European Naphtha Route The fundamental disparity between the two lies in raw material cost structure: Dow concentrates its core production capacity in North America, where ethane is abundant and inexpensive; the current Middle East geopolitical conflict has further amplified this cost advantage—while naphtha-cracking producers face rising costs, ethane-based producers continue expanding gross margins. In contrast, BASF anchors its core capacity in Europe, enduring persistent triple pressure from high electricity prices, high carbon taxes, and expensive naphtha; even with product price hikes, its gross margin recovery remains weaker than that of its North American peers. This regional cost gap directly shapes the industry’s long-term landscape: global new chemical investments in 2026 continue shifting toward North America, Southeast Asia, and China’s integrated refining-and-petrochemical hubs, while domestic European capacity keeps exiting—making industrial relocation an irreversible trend. Three Clear Trends for the Global Plastics & Chemicals Industry in 2026 Trend One: Cyclical Recovery Is Structural, Not Broad-Based Demand Revival—Geopolitical Gains Are Short-Term Whether Dow, BASF, or China’s private-sector refining-and-petrochemical firms, the core driver behind this round of earnings surges is supply contraction-induced price increases—not an explosion in downstream end-demand. Dow’s overall Q2 sales volume declined 1% year-on-year, and packaging plastics volumes fell 4%; BASF saw only partial segment volume growth, with surface treatment technologies posting a slight decline. As navigation through the Strait of Hormuz gradually normalizes, polyethylene prices in the Americas dropped in June. Dow’s management warned that Q3 profitability will moderate due to planned plant maintenance and seasonal demand softness. The window of excess profits generated by geopolitical conflict is limited; medium- to long-term industry profitability will revert to fundamentals of supply and demand—with the pace of recovery in downstream consumption, real estate, and packaging demand determining the sector’s long-term ceiling. Trend Two: The Global Chemical Industry Has Entered the ‘Asset Restructuring Era’—Divestitures, Closures, and Layoffs Have Become Routine In past cyclical troughs, companies typically responded by reducing operating loads or conducting maintenance to weather downturns; in 2026, global giants have uniformly shifted toward permanent asset optimization: divesting low-margin businesses, shutting down aging facilities, implementing large-scale layoffs, and cutting capital expenditures. BASF’s disposal of its coatings business, Dow’s closure of its European cracker facility, and Chinese refining-and-petrochemical leaders’ continuous elimination of small, outdated capacity all signal the industry’s departure from the era of crude expansion—and entry into a new phase where ‘profitability comes first, scale second.’ Over the next three years, high-cost, low-value-added, and energy-intensive capacity will accelerate its exit; industry concentration will further consolidate around leaders possessing low-cost integration and advanced-materials portfolios. Trend Three: Global Capacity Structure Continues to Diverge—Three Advantageous Regions Are Forging Long-Term Competitive Moats North American Ethane Hubs: Dow and INEOS’ North American assets consistently benefit from low-cost feedstock, keeping polyolefins and ethylene gross margins at the industry forefront—forming their core profit pools. China’s Integrated Refining-and-Petrochemical Hubs: Rongsheng, Shenghong, and Hengyi’s multi-million-ton refining-and-petrochemical projects have completed ramp-up, achieving full-chain integration across PX, polyester, and polyethylene—hedging against international feedstock volatility and becoming the Asia-Pacific region’s core profit engine. Middle Eastern Capacity: Leveraging low-cost crude oil, yet constrained by geopolitical risks to export routes, its supply elasticity has sharply declined—leading to weakening long-term pricing power.

Top 20 Global Chemical Companies by Revenue in 2025

In 2025, the global chemical industry continued its trend of ‘revenue growth without profit growth.’ Performance among 59 leading domestic and international companies diverged significantly—some achieved countercyclical growth by divesting non-core businesses, while others faced severe challenges due to rising expenses and market weakness—prompting deep reflection on evolving industry dynamics. (I) Global Chemical Giants: Profitability Reigns Supreme—The Strong Get Stronger Globally, the effects of market consolidation are bearing fruit. Linde delivered an outstanding 2025 performance, achieving annual revenue of $34 billion—a 3% increase year-on-year and a new record high—while its operating margin approached 30%, showcasing the exceptional earnings resilience of this industrial gas giant. PPG also performed impressively, with net profit surging 17% to $1.571 billion—the highest in recent years. By contrast, the chemical industry’s ‘elder statesman,’ BASF, navigated a steady year: annual revenue totaled €59.657 billion (approximately $70 billion); although sales declined slightly year-on-year, net attributable profit doubled to €1.313 billion—demonstrating robust core profitability. (II) Agrochemicals and the European Segment: Bright Spots Amidst a Winter European and agrochemical enterprises displayed notable resilience. Syngenta reported full-year revenue of $28.4 billion; excluding its strategically downsized, low-margin grain trading business, actual revenue grew 2% year-on-year—highlighting stability in its core operations. DSM-Firmenich maintained revenue at approximately €9 billion, essentially flat versus last year. Amid this cyclical trough, multiple companies opted to sell non-core assets to generate cash flow—optimizing asset structures and focusing on high-margin core businesses. This strategic recalibration is gradually reshaping the competitive landscape of the global chemical industry. (III) China’s Rise: Rongsheng Petrochemical Soars Against the Trend—Turns Profitable in Q3 Among the 59 companies, Chinese enterprises stood out notably. Rongsheng Petrochemical emerged as the undisputed ‘revenue champion’ of this earnings roundup, posting full-year revenue of RMB 308.622 billion—ranking third among the industry’s top ten firms, trailing only the two national oil companies. Crucially, its net attributable profit rose 17.09% year-on-year to RMB 848 million, reflecting the gradual effectiveness of its strategic pivot toward new materials. Quarterly data shows the company turned profitable in Q3—indicating steadily recovering profitability across its integrated refining-and-petrochemical value chain. (IV) Risks Within the Chemical Industry Against a backdrop of intensifying industry divergence, some enterprises confront severe operational difficulties. Dow posted a full-year net loss of $2.623 billion—switching from profit to loss. INEOS’s losses widened to €659 million, and Covestro’s net loss reached €644 million. Overall, the chemical industry in 2025 is undergoing a rigorous ‘survival-of-the-fittest’ shakeout.