Business in China is weakening in the second half as expected but the company's view of the market, which accounts for about 13 percent of group sales, has not deteriorated since August, Chief Executive Matthias Zachert told Reuters.

On the other hand, markets in Germany and southern Europe as well as demand from U.S. customers in the automotive and construction industry have surpassed expectations.

"Based on the last few months, we expect to post a third-quarter result that will be about 10 percent over the year-earlier period," Zachert said in a phone interview, referring to adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA).

"We see that the stock market is clearly more moderate in its assessment," Zachert said.

The company is scheduled to release its third-quarter results on Nov. 5.

The stock has lost more than 20 percent since Lanxess on Aug. 6 lifted its 2015 earnings outlook for the second time. It has underperformed the benchmark STOXX Europe 600 Chemicals index, which has lost about 16 percent over the period.

Zachert added the previous guidance for full-year adjusted EBITDA of 840-880 million euros (£619-649 million) remained "roughly intact".

On the downside, he said the recession-hit Brazilian market, where Lanxess has rubber production facilities, remained sluggish.

The shares extended gains on the news and closed 3.4 percent higher, with trading volumes at twice the daily average over the past 90 sessions.

The group's earnings prospects have brightened over the year because of lower raw material costs, a strong U.S. dollar and recent cost-cutting measures it has taken to counter excess output capacity in the global rubber industry.

"We were able to implement cost cuts faster than expected. That trend has continued in the third quarter," Zachert said.

Global rubber overcapacity had prompted the group -- which was spun off from Bayer 10 years ago -- to slow the ramp-up phase of two new Asian plants it is bringing on stream.

Zachert said confidence in business prospects there allowed Lanxess to increase production at the two rubber facilities faster than initially projected during Q3 but that the boost would be somewhat offset by a slowdown in the fourth quarter.

The company last month agreed to sell a 50 percent stake in its synthetic rubber business, the industry's largest, to Saudi Aramco to gain better access to petrochemical raw materials.

(Editing by Jonathan Gould and Mark Potter)

By Ludwig Burger and Patricia Weiss