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UPDATE 2-Chemicals maker Dow profit beats estimates on cost cuts

Arathy S Nair

(Adds details on pricing, volumes, background)

Oct 24 (Reuters) - Dow Inc beat Wall Street estimates for third-quarter profit on Thursday as its efforts to cut costs helped offset weaker prices for its chemicals used in making plastics.

An oversupply of ethylene and polyethylene as well as the impact of U.S.-China trade tensions on demand for chemicals had forced Dow to forecast lower-than-expected third-quarter revenue and cut full-year spending in July.

Dow, which makes chemicals used in paints, cosmetics and plastics, said it saved about $1.37 billion as part of a cost reduction program, while cutting additional $40 million in expenses in the latest quarter.

Dow, created in April from DowDuPont's three-way split and still one of the world's biggest makers of chemicals, is wrestling with a slowing global economy that has hit demand for much of the end-products made using its materials.

Larger rival Germany's BASF reported a 24% drop in operating income for the July-September quarter on Thursday.

Dow's sales volumes fell 2% in the third quarter, while prices declined 12%, the company said in a statement.

While the recent attack on Saudi oil major Aramco and outages in the United States were expected to boost prices, additional capacity from China and Korea as well as low demand amid trade tensions have dampened the impact.

Dow said it had taken measures to boost prices, adding that prices for polyethylene had risen in September.

Sister companies DuPont, which makes chemicals used in the automotive and electronic industries, and Corteva , which makes pesticides and insecticides, are set to post their quarterly reports on Oct 31.

Dow's net income available to shareholders fell to $333 million, or 45 cents per share, in the three months ended Sept. 30 from $1.01 billion, or $1.36 per share, a year earlier.

Excluding items, Dow posted operating earning of 91 cents per share, beating estimates of 73 cents per share, according to Refinitiv IBES data.

Net sales fell 15.2% to $10.76 billion, marginally beating analysts' estimate of $10.74 billion.

Dow shares have fallen nearly 15% since it started trading on April 2 to Wednesday's close. (Reporting by Arathy S Nair in Bengaluru; Editing by Anil D'Silva)