Germany's BASF SE, the world's largest chemicals company by sales, cut its earnings forecasts and its projections for the broader market yesterday, becoming the latest industrial group to fall victim to weak demand in its main European market.

"We have seen a very slow third quarter in terms of demand for Europe ... And we don't feel really a positive momentum going into the fourth quarter and into 2015," chief executive Kurt Bock said.

BASF, whose products include car coatings, foam chemicals and catalytic converters, said slowing growth in emerging markets and lower oil and gas prices also contributed to its gloomy outlook.

Those trends were mitigated by strong petrochemicals margins in the US, benefiting from cheap shale gas supplies, though falling oil prices hurt oil and gas unit Wintershall, which accounts for about a quarter of group operating profit.

Bock said BASF's industrial customers could hold off on petrochemicals orders, anticipating cheaper oil to lead to mark-downs on downstream products.

BASF lowered its forecast for core earnings in 2015 to between €10 billion and €12 billion ($12.7 billion to $15.1 billion) from €14 billion ($17.7 billion) and cut its outlook for global chemical production growth in 2015 to four per cent from 4.9 per cent.

BASF said it aimed to achieve an earnings improvement of €1.3 billion ($1.64 billion) next year, €300 million ($379 million) more than planned, thanks to an efficiency programme running ahead of schedule.

The 150-year-old company, the first to mass produce nitrogen fertilisers about a century ago, said restructuring of its paper chemicals, plastic additives and pigments businesses would also contribute about €500 million ($632.8 million) to earnings from 2017.

Third-quarter operating income rose by nine per cent, more than expected, shored up by strong US petrochemicals margins, a sharp rise in natural gas trading volumes and lower costs for its long-term incentive programme because of the weaker outlook.

Quarterly earnings before interest and tax, adjusted for one-off items, rose to €1.84 billion ($2.32 billion) ahead of the €1.74 billion ($2.2 billion) average estimate in a poll.

Sales rose three per cent to €18.3 billion ($23 billion), also ahead of the poll average of €17.3 billion ($21.8 billion).-Reuters