* CFO says still no recovery in tyre, rubber markets
* CFO guides for middle of Q2 target range
* Shares drop to two-month low, worst DAX performer
(Adds analyst comment, background on feedstock supplies)
By Ludwig Burger and Frank Siebelt
FRANKFURT, June 19 Shares in Lanxess,
the world's largest maker of synthetic rubber for tyres, fell to
a two-month low on Wednesday as the company said it was mired in
weak car markets that showed no sign of recovery.
"The market conditions remain challenging. Car and tyre
demand has not yet recovered," a company spokesman said when
asked about market talk that finance chief Bernhard Duettmann
sounded a cautious note during an investor presentation in New
The spokesman cited Duettmann as saying that Lanxess was
likely to reach the middle of its previous target range.
Germany's Lanxess, which competes with Exxon Mobil
in synthetic rubber for tyres, tubes and window seals, has said
it expects second-quarter adjusted earnings before interest,
taxes, depreciation and amortisation (EBITDA) of 174-220 million
euros ($233-$295 million).
Landesbank Baden-Wuerttemberg analyst Ulle Woerner said
analyst consensus was for slightly higher adjusted EBITDA than
the range mid-point of 200 million euros.
Kepler Cheuvreux analyst Markus Mayer said in a note that
demand would take longer to improve than expected.
"In our view, the news shows just how oversupplied the
rubber market is currently."
The shares extended losses and dropped 3.6 percent to a
two-month low at 1502 GMT, making them the worst performer on
Germany's blue-chip index DAX.
European car sales plunged to their lowest level in two
decades in May, further eroding prospects for a recovery this
The spokesman added that the price of butadiene, the most
important chemical raw material used by Lanxess, has dropped,
particularly in Asia.
The company, which is the world's largest consumer of
butadiene, has long-term contracts with suppliers.
Smaller competitors that mainly buy butadiene on the spot
market lose out to Lanxess when supplies are scarce and
expensive but win more business when prices decline.
(Reporting by Ludwig Burger and Frank Siebelt; Editing by David