It remains to be seen if competitors to German chemicals giant BASF SE (BAS.XE) will emulate the major production cutbacks announced by the company this week, but they aren't disputing its dire view of industry trends.

"Demand has decreased anywhere from 10% to 20%" (industry wide since the start of October), and generally our demand has been in line with the industry," said Bob Plishka, a spokesman for Dow Chemical Co. (DOW).

BASF, the world's biggest chemical company, said this week that it will temporarily shutter 80 plants and reduce output as much as 25% due to a "massive" downturn in key industries, citing in particular the automotive, construction and textile sectors.

Deutsche Bank analyst David Begleiter called the magnitude of the announcement unprecedented in the chemicals industry, adding in a note that it signals an extremely difficult fourth quarter for the industry overall.

BASF also issued its second profit warning in under a month, an indication of the speed at which conditions have deteriorated.

Both Dow Chemical and DuPont Co. (DD) warned in October that a recession appeared likely for 2009. They said this week that conditions continue to deteriorate.

"We anticipate further weakness in automotive and construction markets and slowdown in U.S. and western Europe markets," a DuPont spokesman said in the wake of BASF's announcement.

DuPont declined to comment on the prospect for production cuts in light of the most recent demand trends.

Still, the abrupt move by BASF to steeply curtail production may stem, at least partly, from the fact that its last major output rollback took place in late 2001. Some competitors said they've been trimming production for awhile.

"We've been taking action on underperforming, underutilized and noncompetitive assets for some time," Dow Chemical's Plishka said. Among other moves, he said Dow has shuttered 43 plants in the last two years.

But that doesn't necessarily mean more cuts aren't on the way.

Dow Chief Executive Andrew N. Liveris warned recently that there could be industry-wide "acceleration of capacity rationalization" because of the demand swoon. Plishka added that Dow is "prepared to take additional steps as necessary," although he said the company hasn't made any new production cuts specifically because of the latest demand swoon.

Dow Chemical, the largest U.S. chemicals producer by revenue, already has announced plans to reduce its 2008 budget for capital expenditures by $100 million, to $2.1 billion, and its discretionary spending by $100 million to $150 million.

Rohm & Haas Co. (ROH), meanwhile, said it reduced its installed capacity by about 30% over the summer, primarily to cut production of paints and coatings. Rohm & Haas, which is in the process of being acquired by Dow Chemical, said it has no additional plans to cut output.

"Basically, our industry has been seeing slowness for some time," Rohm & Haas spokeswoman Emily Riley said. But "we are not doing anything similar" to BASF in reaction to the latest trends.

Regardless, analysts said the steep downturn in demand doubtless will make its impact felt in fourth-quarter earnings reports.

"We anticipate more profit warnings as global chemical production slows dramatically," Soleil Securities analyst Mark Gulley said in a research note.

Gulley added that "no one will be spared" because "the global chemical industry is highly intertwined as industry players are suppliers to, customers of, and competitors of each other."

Shares of many chemical producers have been hammered so far in 2008, as has the stock market overall. Dow Chemical, trading recently at $18.61 a share, is off 53% for the year, while DuPont is off 46%, trading recently at $23.76 a share.

Rohm & Haas, which is being bought by Dow for $78 a share, is up 36% since the start of 2008. It was trading recently at $72.08 a share.

Copyright (c) 2008 Dow Jones & Company, Inc.