The chemical industry promises another year of cutbacks

In an environment rife with uncertainty, overcapacity, and sluggish markets, chemical company results plunged in 2025. But as executives disclosed financial results for the year, they argued that their efforts to control their own destinies—through cost cutting, streamlining, and portfolio management—at least blunted the blows from a hostile market. They vowed to continue advancing such measures in 2026.BASF, the world’s largest chemical maker, wrapped up its earnings season posting a 2.9% decline in 2025 sales and a 38.8% drop in earnings from the previous year. Sales volumes increased for all its businesses except basic chemicals, but prices and currency exchange rates worked against the German firm.“We in the chemical industry faced an uncertain and very volatile global market environment with considerable headwinds in 2025,” CEO Markus Kamieth said in a presentation to reporters on Feb. 27. “We therefore focused primarily on the things we can control within the framework of our Winning Ways strategy.”For example, BASF has reduced annual costs by $2 billion since 2023 and plans to boost that number to $2.7 billion by the end of this year. In the past 2 years, the company also shed 11% of its senior executives and reduced head count by 4,800 workers, excluding the 1,000 it has hired at its large new site in China. In October, it inked an agreement to sell a majority stake in its coatings business to the private equity firm Carlyle and the Qatar Investment Authority.Dow set the tone for the industry in late January when