BASF have warned that profits will be lower than last year after reporting a fall in operating margins during the third quarter. Chairman of the board, Jürgen Hambrecht dismissed the optimistic view that the economy is poised for a rapid recovery.

‘We at BASF look at facts rather than moods and the facts are October business was better than September. The indications are that we are bottoming out. But what does that mean? Is there going to be a sudden jump in demand? No’, he said.

BASF are the world’s largest chemicals group in terms of sales so are seen as an important industry indicator. Many of the world’s largest chemicals companies have reported increased sales since August but are too cautious to predict an upturn, having seen short term improvements fade away several times in the past two years.

BASF are planning to close or mothball excess capacity in their badly performing US and European operations but will continue to invest in Asia, China in particular.

Despite slightly increased sales in the first nine months of 2003, net income fell 51%.