German chemical firm Covestro's sales volumes were 0.4pc lower in the first quarter compared with the same period last year, as a 2.4pc fall in the Asia-Pacific region more than offset increases elsewhere.
The firm's sales revenue decreased by 0.9pc on the year to €3.48bn. Pricing was stable in most regions but declined in North America.
Covestro's performance materials segment — which includes standard MDI, TDI, long chain polyols, standard polycarbonate resins and basic chemicals — had a 2pc year-on-year drop in sales volumes and a 0.7pc fall in sales revenue.
Commenting on the evolving trade war between the US and China, Covestro said there are "unclear consequences" to the "erratically imposed" tariffs. No conclusive evaluation is possible, it said.
If tariffs lead to volumes remaining in the Asia-Pacific region or coming to Europe, it could cause price and margin erosion, the firm said. Covestro will follow a "local for local" strategy, it said, aiming to keep most production within the region it is produced.
The company flagged risks from global economic volatility, which it expects to dampen core industries such as the automotive, construction and electronic sectors. The furniture sector has already been affected, with the risk of a further slowdown, it said.
Covestro has modified its outlook for core sectors compared to its February guidance. It now expects the automotive sector to grow by 2.4pc in 2025, down from the previously forecast 2.7pc.
It expects the construction sector, a key end use for MDI, to rise by 0.5pc, up from 0.2pc previously forecast. However, within that, it expects residential construction to decline by 2pc, compared with a 1.5pc fall previously expected.
It expects the soft furnishings, a major end use for TDI, to grow by 1.3pc year on year, down from the previous forecast of 2.4pc.
