Citi removes BASF from catalyst watch as Asian spreads reverse

Citi removed BASF from its positive “Catalyst Watch” after Asian chemical spreads reversed in May and BASF reported weaker-than-expected market-share gains in Europe. The bank cut its net pricing outlook for BASF’s upstream segments to about €1.0bn for FY2026 (from €1.5bn in April) and set a new base case of roughly €7.2bn (versus an earlier upside case near €9bn), reducing near-term upside for the stock. The Asian spread reversal is viewed as a leading indicator for global chemicals and dampens momentum across the sector. Citi remains constructive on U.S. polyethylene producers — notably Dow and LyondellBasell — which benefit from a favorable oil-to-gas ratio and ethane feedstock cost advantage versus European peers. Market impact: downgrades BASF’s near-term stock thesis while supporting relative strength for U.S. ethylene/PE names, potentially shifting investor flows within the chemicals complex.