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BASF Launches Key Steam Cracker at New Zhanjiang Verbund Site

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Key Takeaways

  • BASF launched a 1-million-ton ethylene steam cracker at its Zhanjiang Verbund site in China.
  • BASF stated that the cracker's main compressors run on renewable energy, advancing sustainable production.
  • BASF will supply downstream units and extend its local value chain to serve China's chemical market.

BASF SE (BASFY - Free Report) has started up its steam cracker at its new Verbund complex in Zhanjiang, China. This marks a key pillar for the company’s multi-billion-euro investment in China and one of the largest single projects in its global network for the Asia-Pacific region.  

The steam cracker, a central facility that breaks down hydrocarbons like naphtha and butane into key building blocks such as ethylene and propylene, began operations as planned, with an annual ethylene capacity of around 1 million metric tons. This installation is the first of its kind globally to power its main compressors entirely with renewable energy, reflecting BASF’s push toward more sustainable chemical production.  

The cracker will supply multiple downstream units on the site and help extend BASF’s value chain locally to serve a broad range of industries in China, the world’s largest and fastest-growing chemical market. This development follows earlier progress at the Zhanjiang site, including the start-up of several propylene downstream plants and positions the new facility as one of BASF’s largest integrated complexes worldwide. Zhanjiang will be the company’s third biggest Verbund site globally after Ludwigshafen and Antwerp. 

Shares of BASFY are up 0.5% over the past six months against the industry’s 13% decline. 

Zacks Investment ResearchImage Source: Zacks Investment Research

BASFY’s Zacks Rank & Key Picks

BASFY carries a Zacks Rank of #4 (Sell).

Better-ranked stocks in the Basic Materials space include LSB Industries, Inc. (LXU - Free Report) , Air Liquide S.A. (AIQUY - Free Report) and Commercial Metals Company (CMC - Free Report) . LXU and CMC sport a Zacks Rank of #1 (Strong Buy), while AIQUY carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for LXB’s current-year earnings is pegged at 36 cents per share, indicating a 57% year-over-year increase. Its earnings beat the Zacks Consensus Estimates in two of the trailing four quarters and missed twice, with the average earnings surprise being 141.3%.

The Zacks Consensus Estimate for AIQUY’s current fiscal-year earnings stands at $1.59 per share, implying a 28.23% year-over-year increase. Shares of AIQUY are down 12.5% over the past six months.

The Zacks Consensus Estimate for CMC’s current fiscal-year earnings is pegged at $7.05 per share, indicating a 125.24% year-over-year increase. Shares of CMC are up 39.6% over the past six months.

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