~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For the transition period from~~ ~~________________~~ to ~~________________~~

Former name, former address and former fiscal year, if changed since last report.

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes x No o

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

							Unaudited (dollars in thousands, except par value)

	March 31, 2003			December 31, 2002 ^*			June 30, 2003			December 31, 2002 ^*


ASSETS
Current assets
Cash and cash equivalents	$	12,044		$	13,857		$	15,098		$	13,857
Accounts receivable, net		54,911			53,353			67,964			53,353
Inventories
Raw materials and supplies		12,996			11,342			13,352			11,342
Work-in-process and finished goods		12,673			12,294			14,739			12,294
Prepaid expenses and other current assets		14,529			12,827			12,298			12,827

Total current assets		107,153			103,673			123,451			103,673

Property, plant and equipment, at cost		117,569			113,207			123,125			113,207
Less accumulated depreciation		67,594			64,695			70,540			64,695

Net property, plant and equipment		49,975			48,512			52,585			48,512
Goodwill		22,308			21,927			24,155			21,927
Other intangible assets		5,639			5,852			5,771			5,852
Investments in associated companies		7,247			9,060			5,420			9,060
Deferred income taxes		10,545			10,609			10,566			10,609
Other assets		14,457			14,225			15,093			14,225

Total Assets	$	217,324		$	213,858		$	237,041		$	213,858


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings and current portion of long-term debt	$	16,015		$	12,205		$	19,987		$	12,205
Accounts and other payables		29,340			29,423			33,828			29,423
Accrued compensation		6,283			10,254			6,192			10,254
Other current liabilities		12,711			14,262			13,471			14,262

Total current liabilities		64,349			66,144			73,478			66,144
Long-term debt		16,590			16,590			16,620			16,590
Deferred income taxes		1,529			1,518			1,700			1,518
Other noncurrent liabilities		34,145			33,889			36,006			33,889

Total liabilities		116,613			118,141			127,804			118,141

Minority interest in equity of subsidiaries		8,489			7,662			9,585			7,662

Shareholders’ Equity
Common stock $1 par value; authorized 30,000,000 shares; issued (including treasury shares) 9,664,009 shares		9,664			9,664			9,664			9,664
Capital in excess of par value		720			626			1,174			626
Retained earnings		111,591			110,448			113,083			110,448
Unearned compensation		(1,087	)		(1,245	)		(931	)		(1,245	)
Accumulated other comprehensive (loss)		(24,483	)		(27,078	)		(20,410	)		(27,078	)

		96,405			92,415			102,580			92,415
Treasury stock, shares held at cost; 2003 - 310,720, 2002 - 324,109		(4,183	)		(4,360	)
Treasury stock, shares held at cost; 2003 – 213,566, 2002 - 324,109								(2,928	)		(4,360	)

Total shareholders’ equity		92,222			88,055			99,652			88,055

	$	217,324		$	213,858		$	237,041		$	213,858

The accompanying notes are an integral part of these condensed consolidated financial statements.

							Unaudited (dollars in thousands, except per share data)
	Unaudited (dollars in thousands, except per share data)
	Three Months ended March 31,						Three months ended June 30,						Six Months ended June 30,

	2003			2002			2003			2002			2003			2002

Net sales	$	73,337		$	59,927		$	83,453		$	69,457		$	156,790		$	129,384
Cost of goods sold		44,971			35,570			54,506			40,495			99,477			76,065

Gross margin		28,366			24,357			28,947			28,962			57,313			53,319
Selling, general and administrative expenses		22,685			20,024			23,223			23,279			45,908			43,303

Operating income		5,681			4,333			5,724			5,683			11,405			10,016
Other income, net		88			280
Other income (expense), net								447			(28	)		535			252
Interest expense		(350	)		(419	)		(387	)		(407	)		(737	)		(826	)
Interest income		211			253			152			295			363			548

Income before taxes		5,630			4,447			5,936			5,543			11,566			9,990
Taxes on income		1,858			1,423			1,843			1,774			3,701			3,197

		3,772			3,024			4,093			3,769			7,865			6,793
Equity in net income (loss) of associated companies		86			(17	)
Equity in net income of associated companies								169			201			255			184
Minority interest in net income of subsidiaries		(751	)		(649	)		(787	)		(734	)		(1,538	)		(1,383	)

Net income	$	3,107		$	2,358		$	3,475		$	3,236		$	6,582		$	5,594

Per share data:
Net income - basic	$	0.34		$	0.26
Net income - diluted	$	0.33		$	0.26
Net income – basic							$	0.37		$	0.35		$	0.71		$	0.61
Net income – diluted							$	0.36		$	0.35		$	0.69		$	0.60
Dividends declared	$	0.21		$	0.21		$	0.21		$	0.21		$	0.42		$	0.42
Based on weighted average number of shares outstanding:
Basic		9,270,775			9,154,303			9,323,895			9,249,925			9,297,482			9,202,378
Diluted		9,508,593			9,212,700			9,671,578			9,308,678			9,593,466			9,262,025

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Unaudited (dollars in thousands)						Unaudited (dollars in thousands)

	2003			2002 ^*			2003			2002

Cash flows from operating activities
Net income	$	3,107		$	2,358		$	6,582		$	5,594
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		1,646			1,229			3,394			2,327
Amortization		215			82			438			325
Equity in net income of associated companies		(86	)		17			(255	)		(184	)
Minority interest in earnings of subsidiaries		751			649			1,538			1,383
Deferred compensation and other postretirement benefits		77			(260	)		(382	)		(329	)
Other, net		481			388
Pension and other, net								2,798			1,096
Increase (decrease) in cash from changes in current assets and current liabilities:
Accounts receivable, net		(399	)		(2,471	)		(11,380	)		(4,532	)
Inventories		(1,389	)		981			(2,789	)		(798	)
Prepaid expenses and other current assets		(1,342	)		(1,918	)		1,204			(2,293	)
Accounts payable and accrued liabilities		(5,927	)		391			(2,467	)		2,750
Change in restructuring liabilities		(699	)		(865	)		(866	)		(1,167	)

Net cash (used in) provided by operating activities		(3,565	)		581			(2,185	)		4,172

Cash flows from investing activities
Investments in property, plant and equipment		(2,113	)		(1,527	)		(4,859	)		(5,060	)
Dividends and distributions from associated companies		1,800			—			3,890			307
Payments related to acquisitions		—			(13,676	)		(1,105	)		(21,576	)
Other, net		(40	)		66			53			(9	)

Net cash (used in) investing activities		(353	)		(15,137	)		(2,021	)		(26,338	)

Cash flows from financing activities
Net increase in short-term borrowings		3,791			11,994			7,747			22,009
Repayment of long-term debt		(7	)		(30	)
Dividends paid		(1,961	)		(1,872	)		(3,924	)		(3,802	)
Treasury stock issued		86			442			1,697			2,404
Distributions to minority shareholders		(213	)		(497	)		(609	)		(1,335	)
Other, net								3			85

Net cash provided by financing activities		1,696			10,037			4,914			19,361

Effect of exchange rate changes on cash		409			(112	)		533			572

Net (decrease) in cash and cash equivalents		(1,813	)		(4,631	)
Net increase (decrease) in cash and cash equivalents								1,241			(2,233	)
Cash and cash equivalents at beginning of period		13,857			20,549			13,857			20,549

Cash and cash equivalents at end of period	$	12,044		$	15,918		$	15,098		$	18,316

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~Certain reclassifications of prior year data have been made to improve comparability.~~

Quaker Chemical Corporation
Notes to Condensed Consolidated Financial Statements
(Dollars in Thousands)
(Unaudited)

The condensed consolidated financial statements included herein are unaudited and have been prepared in accordance with generally accepted accounting principles for interim financial reporting and Securities and Exchange Commission regulations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Certain prior year amounts have been reclassified to conform to the 2003 presentation. In the opinion of management, the financial statements reflect all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods. The results for the three and six months ended ~~March 31,~~June 30, 2003 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the Annual Report filed on Form 10-K for the year ended December 31, 2002.

As part of the Company’s chemical management services, certain third party products are transferred to customers. Where the Company acts as a principal, revenues are recognized on a gross reporting basis at the selling price negotiated with ~~clients.~~customers. Where the Company acts as an agent, such revenue is recorded using net reporting as service revenues, at the amount of the administrative fee earned by the Company for ordering the goods. Third party products transferred ~~under these arrangements~~where the Company acts as an agent and revenue is recorded net totaled ~~$7,287~~$13,440 and ~~$6,186~~$14,187 for the ~~three~~six months ended ~~March 31,~~June 30, 2003 and 2002, respectively.

As previously disclosed, on March 1, 2002, the Company acquired certain assets and liabilities of United Lubricants Corporation (“ULC”) and on April 22, 2002, the Company acquired 100% of the outstanding stock of Epmar Corporation (“Epmar”). The allocation of purchase price of assets and liabilities recorded for the acquisitions are now final and did not materially change from the amounts disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

In January 2003, the Financial Accounting Standards Board (“FASB”), issued FASB Interpretation No. 46 (“FIN 46”), “Consolidation of Certain Variable Interest Entities, (“VIEs”), which is an interpretation of Accounting Research Bulletin (“ARB”) No. 51, “Consolidated Financial Statements.” FIN 46 addresses the application of ARB No. 51 to VIEs, and generally would require that assets, liabilities and results of the activities of a VIE be consolidated into the financial statements of the enterprise that is considered the primary beneficiary. FIN 46 is effective for interim periods beginning after June 15, 2003 to VIEs in which an enterprise holds a variable interest that it acquired before February 1, 2003. The Company has preliminarily determined that its real estate joint venture is a VIE and that the Company is not the primary beneficiary.

In January 2001, the Company contributed its Conshohocken, Pennsylvania property and buildings (the “Site”) to this real estate joint venture (the “Venture”) in exchange for a 50% interest in the Venture. The Venture did not assume any debt or other obligations of the Company. The Venture renovated certain of the existing buildings at the Site, as well as built new office space (the “Project”). In December 2000, the Company entered into an agreement with the Venture to lease approximately 38% of the Site’s available office space for a 15-year period commencing February 2002, with multiple renewal options. As of June 30, 2003, approximately 93% of the Site’s office space was under lease and the Site (including improvements thereon) was subject to encumbrances securing indebtedness of the Venture in the amount of $27,045. The Company has not guaranteed nor is it obligated to pay any principal, interest or penalties on the indebtedness of the Venture, even in the event of default by the Venture. At June 30, 2003, the Venture had property with a net book value of $26,412, total assets of $29,024, and total liabilities of $27,362.

In April 2003, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 149 “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” This standard amends and clarifies financial accounting and reporting for derivative instruments and hedging activities, primarily as a result of decisions made by the FASB Derivatives Implementation Group subsequent to the original issuance of SFAS No. 133 and in connection with other FASB projects. This standard is generally effective prospectively for contracts and hedging relationships entered into or modified after June 30, 2003. The Company is currently evaluating the impact of this standard, but does not expect the adoption to have a material impact on the financial statements. The Company is not currently a party to any derivative financial instruments.

In May 2003, the FASB issued SFAS No. 150 “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” SFAS No. 150 changes the accounting for certain financial instruments that, under previous guidance, could be classified as equity or mezzanine equity, by now requiring those same instruments to be classified as liabilities (or assets in some circumstances) in the statement of financial position. Further, SFAS No. 150 requires disclosure regarding the terms of those instruments and settlement alternatives. The guidance in SFAS No. 150 is generally effective for all financial instruments entered into or modified after May 31, 2003, and is otherwise effective at the beginning of the first interim period beginning after

June 15, 2003. The Company is in the process of ~~reviewing~~evaluating this standard, but does not expect the ~~provisions of FIN 46, particularly in relation~~adoption to have a material impact on the Company’s real estate joint venture previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, to determine if the joint venture must be consolidated effective July 1, 2003.financial statements.

In December 2002, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure.” This standard amends the transition and disclosure requirements of SFAS No. 123, “Accounting for Stock-Based Compensation.” As permitted by SFAS No. 148, the Company continues to account for stock option grants in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees.” Accordingly, no compensation expense has been recognized for stock options since all options granted had an exercise price equal to the market value of the underlying stock on the grant date. The Company typically issues the majority of its stock options annually during the first quarter. Therefore, the Company expects there to be little to no pro-forma impact to earnings per share for the subsequent 2003 quarters. The following tables illustrate the effect on net earnings and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. ~~123 as well as the assumptions used in the calculation for the three months ended March 31, :~~

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions for the three months ended March 31, :123.

The following table summarizes earnings per share (EPS) ~~calculations for the three months ended March 31, :~~calculations:

					Three Months Ended June 30,				Six Months Ended June 30,

	2003		2002		2003		2002		2003		2002

Numerator for basic EPS and diluted EPS– net income	$	3,107	$	2,358	$	3,475	$	3,236	$	6,582	$	5,594

Denominator for basic EPS–weighted average shares		9,271		9,154		9,324		9,250		9,297		9,202
Effect of dilutive securities, primarily employee stock options		238		59		348		59		296		60

Denominator for diluted EPS–weighted average shares and assumed conversions		9,509		9,213		9,672		9,309		9,593		9,262

Basic EPS	$	.34	$	.26	$	.37	$	.35	$	.71	$	.61
Diluted EPS	$	.33	$	.26	$	.36	$	.35	$	.69	$	.60

~~Metalworking process chemicals - products used as lubricants for various heavy industrial and manufacturing applications.~~

~~Coatings - temporary and permanent coatings for metal and concrete products and chemical milling maskants.~~

The table below presents information about the reported segments for the ~~three~~six months ended ~~March 31,~~June 30, :

	Metalworking Process Chemicals		Coatings		Other Chemical Products		Total		Metalworking Process Chemicals		Coatings		Other Chemical Products		Total

2003
Net sales	$	66,983	$	5,259	$	1,095	$	73,337	$	142,974	$	11,565	$	2,251	$	156,790
Operating income		13,089		1,305		276		14,670		25,751		3,016		438		29,205

2002
Net sales	$	55,574	$	3,552	$	801	$	59,927	$	117,902	$	9,383	$	2,099	$	129,384
Operating income		11,479		829		209		12,517		25,194		2,397		582		28,173

Operating income comprises revenue less related costs and expenses. Non-operating items primarily consist of general corporate expenses identified as not being a cost of operation, interest expense, interest income, and license fees from non-consolidated associates.

A reconciliation of total segment operating income to total consolidated income before taxes, for the ~~three~~six months ended ~~March 31,~~June 30, is as follows:

	2003			2002
							2003			2002

Total operating income for reportable segments	$	14,670		$	12,517		$	29,205		$	28,173
Non-operating expenses		(7,128	)		(6,873	)		(17,362	)		(17,832	)
Depreciation and amortization		(1,861	)		(1,311	)
Amortization								(438	)		(325	)
Interest expense		(350	)		(419	)		(737	)		(826	)
Interest income		211			253			363			548
Other income, net		88			280			535			252

Consolidated income before taxes	$	5,630		$	4,447		$	11,566		$	9,990

The following table summarizes comprehensive ~~income for the three months ended March 31, :~~income:

						Three Months Ended June 30,				Six Months Ended June 30,

	2003		2002			2003		2002		2003		2002

Net income	$	3,107	$	2,358		$	3,475	$	3,236	$	6,582	$	5,594
Foreign currency translation adjustments		2,595		(2,303	)		4,073		2,746		6,668		443

Comprehensive income	$	5,702	$	55		$	7,548	$	5,982	$	13,250	$	6,037

In 2001, Quaker’s management approved restructuring plans to realign its organization and reduce operating costs. Quaker’s restructuring plans included the closure and sale of its manufacturing facilities in the U.K. and France. In addition, Quaker consolidated certain functions within its global business units and reduced administrative functions, as well as expensed costs related to abandoned acquisitions. Included in the restructuring charges are provisions for the severance of 53 employees.

Restructuring and related charges of $5,854 were recognized in 2001. The charge comprised $2,644 related to employee separations, $2,613 related to facility rationalization charges and $597 related to abandoned acquisitions. Employee separation benefits under each plan varied depending on local regulations within certain foreign countries and included severance and other benefits. As of ~~March 31,~~June 30, 2003, Quaker had completed 50 of the planned 53 employee separations under the 2001 plans. During the fourth quarter of 2002, the Company

completed the sale of its U.K. manufacturing facility. Quaker closed this facility at the end of 2001. Quaker expects to substantially complete the initiatives contemplated under the restructuring plans, including the sale of its manufacturing facility in France, by the end of 2003.

Accrued restructuring balances, included in other current liabilities, ~~as of March 31, 2003 and December 31, 2002~~ are as follows:

	Balance December 31, 2002		Payments			Currency translation and other			Balance March 31, 2003		Balance December 31, 2002		Payments			Currency translation and other		Balance June 30, 2003

Employee separations	$	1,274	$	(641	)	$	5		$	638	$	1,274	$	(735	)	$	14	$	553
Facility rationalization		869		(58	)		(10	)		801		869		(131	)		11		749

Total	$	2,143	$	(699	)	$	(5	)	$	1,439	$	2,143	$	(866	)	$	25	$	1,302

In May 2003, the Company acquired a range of cleaners, wet temper fluids and other products from KS Chemie, located in Dusseldorf, Germany for approximately $1,100. This acquisition strategically strengthens the Company’s global leadership position as a process fluids supplier to the steel industry. The Company recorded $345 of intangible assets comprised of product line technology to be amortized over a range of five to ten years. The Company also recorded $715 of goodwill, which was assigned to the Metalworking process chemicals segment. The pro forma results of operations have not been provided because the effects were not material.

The changes in carrying amount of goodwill for the ~~three~~six months ended ~~March 31,~~June 30, 2003 are as follows:

Gross carrying amounts and accumulated amortization for intangible assets as of ~~March 31,~~June 30, 2003, are as follows:

	Gross carrying Amount		Accumulated Amortization		Gross carrying Amount		Accumulated Amortization

Amortized intangible assets Customer lists and rights to sell	$	3,850	$	491
Amortized intangible assets
Customer lists and rights to sell					$	3,850	$	(602	)
Trademarks and patents		2,300		1,543		2,300		(1,553	)
Formulations and product technology		1,420		218		1,765		(278	)
Other		1,494		1,173		1,513		(1,224	)

Total	$	9,064	$	3,425	$	9,428	$	(3,657	)

Estimated annual aggregate amortization expense for the current year and subsequent five years is as follows:


For the year ended December 31, 2003	$	842	$	882
For the year ended December 31, 2004	$	692	$	793
For the year ended December 31, 2005	$	684	$	760
For the year ended December 31, 2006	$	684	$	741
For the year ended December 31, 2007	$	277	$	337
For the year ended December 31, 2008	$	189	$	254

In June 2003, the Company entered into a $10,000 committed credit facility with a bank, which expires in June 2004. At the Company’s option, the interest rate for borrowings under the agreement may be based on the eurodollar rate plus a margin or the prime rate plus a margin. The provisions of the agreement require that the Company maintain certain financial ratios and covenants, all of which the Company was in compliance with as of June 30, 2003. In July 2003, an amendment increased this committed credit facility to $15,000.

In June 2003, the Company entered into a $10,000 uncommitted demand credit facility, with a different bank. At the Company’s option, the interest rate for borrowings under the agreement may be based on the prime rate or the LIBOR rate plus a margin.

As a result of these agreements, the Company increased its credit facilities from $15,000 committed and $10,000 uncommitted at the end of March 2003 to its current position of $30,000 committed and $20,000 uncommitted. The Company had approximately $17,100 and $22,048 outstanding on its credit facilities as of June 30, 2003 and 2002, respectively.

The Company is involved in environmental clean-up activities and litigation in connection with an existing plant location and former waste disposal sites. The Company identified certain soil and groundwater contamination at AC Products, Inc. (“ACP”), a wholly owned subsidiary. In coordination with the Santa Ana California Regional Water Quality Board, ACP is remediating the contamination. During the second quarter of 2000, it was discovered during an internal environmental audit that ACP had failed to properly report its air emissions. In response, an internal investigation of all environmental, health, and safety matters at ACP was conducted. ACP has voluntarily disclosed these matters to regulators and has taken steps to correct all environmental, health and safety issues discovered. In connection with these activities the Company recorded pre-tax charges totaling $500 and $1,500 in 2001 and 2000, respectively. The Company believes that the remaining potential-known liabilities associated with these matters ranges from approximately ~~$900~~$800 to ~~$1,600,~~$1,500, for which the Company has sufficient reserves. Notwithstanding the foregoing, the Company cannot be certain that liabilities in the form of remediation expenses, fines, penalties, and damages will not be incurred in excess of the amount reserved.

An inactive subsidiary of the Company that was acquired in 1978 sold certain products containing asbestos, primarily on an installed basis, and is among the defendants in numerous lawsuits alleging injury due to exposure to asbestos. The subsidiary discontinued operations in 1991 and has no remaining assets other than its existing insurance policies. To date, the overwhelming majority of these claims have been disposed of without payment and there have been no adverse judgments against the subsidiary. Based on an initial analysis of the existing and anticipated future claims against this subsidiary, it is currently projected that the subsidiary’s total liability over the next 50 years for these claims is approximately ~~$15 million~~$15,000 (excluding the costs of defense). Although the Company has also been named as a defendant in certain of these cases, no claims have been actively pursued against the

Company and the Company has not contributed to the defense or settlement of any of these cases pursued against the subsidiary. These cases have been handled to date by the subsidiary’s primary insurers who agreed to pay all defense costs and be responsible for all damages assessed against the subsidiary arising out of existing and future asbestos claims up to the aggregate limits of the policies. A significant portion of this primary insurance coverage was provided by an insurer that is now insolvent, and the other primary insurers have recently asserted that the aggregate limits of their policies have been exhausted. The subsidiary is challenging the applicability of these limits to the claims being brought against the subsidiary. The subsidiary has

additional coverage under its excess policies. The Company believes, however, that if the coverage issues under the primary policies are resolved adversely to the subsidiary, the subsidiary’s insurance coverage will likely be exhausted within the next three to five years. As a result, liabilities in respect of claims not yet asserted may exceed coverage available to the subsidiary.

If the subsidiary’s insurance coverage were to be exhausted, claimants of the subsidiary may actively pursue claims against the Company because of the parent-subsidiary relationship. Although asbestos litigation is particularly difficult to predict, especially with respect to claims that are currently not being actively pursued against the Company, the Company does not believe that such claims would have merit or that the Company would be held to have liability for any unsatisfied obligations of the subsidiary as a result of such claims. After evaluating the nature of the claims filed against the subsidiary and the small number of such claims that have resulted in any payment, the potential availability of additional insurance coverage at the subsidiary level, the additional availability of the Company’s own insurance coverage and the Company’s strong defenses to claims that it should be held responsible for the subsidiary’s obligations because of the parent-subsidiary relationship, the Company believes that the inactive subsidiary’s liabilities will not have a material impact on the Company’s financial condition, cash flows or results of operations.

The Company is party to other litigation which management currently believes will not have a material adverse effect on the Company’s results of operations, cash flows or financial condition.

In July 2003, the Company acquired all of the outstanding stock of Eural S.r.l., a privately held company located in Tradate, Italy for $5,700. Eural manufactures a variety of specialty metalworking fluids primarily for the Italian market. The Company is currently assessing the allocation of the purchase price. Pro-forma results of operations have not been presented because the effects were not material.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Quaker’s cash and cash equivalents ~~decreased~~increased to ~~$12.0~~$15.1 million at ~~March 31,~~June 30, 2003 from $13.9 million at December 31, 2002. The ~~decrease~~increase resulted primarily from ~~$3.6~~$2.2 million cash used in operating activities, ~~$0.4~~$2.0 million cash used in investing activities, offset by ~~$1.7~~$4.9 million cash provided by financing activities.

Net cash flows used in operating activities were ~~$3.6~~$2.2 million in the first ~~quarter~~six months of 2003 compared to cash flows provided by operating activities of ~~$0.6~~$4.2 million in the same period of 2002. The decrease was primarily due to increased cash out flows offrom working capital accounts offset by higher net income, depreciation and ~~amortization.~~amortization expense. The change in cash flows from accounts receivable was primarily due to $6.7 million of sales attributable to the Company’s recently awarded chemical management services (CMS) contracts, which were effective May 1, 2003. Increased ~~inventory levels were caused by higher~~ business activity as well as higher raw material costs accounted for the increased inventory levels. Increased cash flows from prepaid expenses and other current assets versus the ~~build up~~prior year is primarily due to a $2.6 million refund related to a settlement from a tax audit at one of ~~additional inventory~~our foreign entities. The change in ~~Brazil to provide protection against foreign exchange rate differentials. Decreased~~ cash flows from accounts payable and accrued liabilities ~~were~~is due to higher annual incentive compensation payments as well as timing related to ~~higher~~high levels of accounts payable. The change in cash flows from accounts receivable in the first quarter of 2002 is reflective of the generally poor economic conditions experienced by the Company’s customers in late 2001 and earlypayable at December 31, 2002.

Net cash flows used in investing activities were ~~$0.4~~$2.0 million in the first ~~quarter~~six months of 2003 compared to ~~$15.1~~$26.3 million in the same period of 2002. The decrease was primarily related to ~~$13.7~~$21.6 million cash used in the first ~~quarter~~six months of 2002 for the acquisitions of United Lubricants Corporation (“ULC”) and Epmar Corporation (“Epmar”) versus $1.1 million used in 2003 for the acquisition of certain ~~assets and liabilities~~product lines from KS Chemie. Reference is made to Note 8 of ~~United Lubricants Corporation (“ULC”). During~~ the ~~first quarter~~notes to condensed consolidated financial statements which appears in Item 1 of ~~2003~~this Quarterly Report on Form 10-Q. In addition, the Company also received ~~a $1.8~~$4.2 million of priority ~~distribution~~cash distributions from its real estate joint ~~venture. The Company expects to receive an additional $2.2 million priority distribution later in 2003.~~

~~Expenditures for property, plant, and equipment totaled $2.1 million~~venture in the first ~~quarter~~six months of 2003 compared to $1.5 million in the same period of 2002. The increase is primarily due to increased capital expenditures related to the Company’s ERP implementation, upgrades to the Company’s Conshohocken laboratory facility, and the timing of the Company’s 2002 acquisitions.2003.

Net cash flows provided by financing activities were ~~$1.7~~$4.9 million for the first ~~quarter~~six months of 2003 compared ~~with $10.0~~to $19.4 million for the same period of the prior year. The net change was primarily due to ~~$12.0~~$22.0 million of short-term borrowings incurred in the first

~~quarter~~ six months of 2002 ~~primarily~~ used to finance the Company’s acquisitions of ULC ~~acquisition~~and Epmar versus ~~$3.8 million~~$7.7 of short-term borrowings in 2003 used to fund working capital needs.

In June 2003, the Company entered into a $10.0 million committed credit facility with a bank, which expires in June 2004. At the Company’s option, the interest rate for borrowings under the agreement may be based on the eurodollar rate plus a margin or the prime rate plus a margin. The provisions of the agreement require that the Company maintain certain financial ratios and covenants, all of which the Company was in compliance with as of June 30, 2003. In July 2003, an amendment increased this committed credit facility to $15.0 million.

In June 2003, the Company entered into a $10.0 million uncommitted demand credit facility, with a different bank. At the Company’s option, the interest rate for borrowings under the agreement may be based on the prime rate or the LIBOR rate plus a margin.

As a result of these agreements, the Company has increased its credit facilities from $15.0 million committed and $10.0 million uncommitted at the end of March 2003 to its current position of $30.0 million committed and $20.0 million uncommitted. The Company had approximately $17.1 and $22.0 million outstanding on its credit facilities as of June 30, 2003 and 2002, respectively.

The Company believes that its balance sheet remains strong with a debt to total capital ratio of ~~26% as of the March 31,~~27% at June 30, 2003 compared to 25% at the end of 2002 and ~~30% as of March 31,~~34% at June 30, 2002. The Company further believes it is capable of supporting its operating requirements including pension plan contributions, payment of dividends to shareholders, possible acquisition and business opportunities, and possible resolution of contingencies, through internally generated funds supplemented with debt as needed.

Comparison of First ~~Quarter~~Six Months 2003 with First ~~Quarter~~Six Months 2002

Consolidated net sales for the first ~~quarter~~six months of ~~2003 were~~the year increased to a record ~~$73.3, a 22% increase compared to~~$156.8 million, up 21% from $129.4 million for the first ~~quarter~~six months of 2002. Foreign exchange rate translation and the timing of the Company’s 2002 acquisitions favorably impacted net sales by $6.3 million and $8.1 million, respectively. Year-to-date 2003 consolidated net sales also include $6.7 million from the Company’s recently awarded Chemical Management Services (CMS) contracts, which were effective May 1, 2003.

Gross margin as a percentage of sales declined from 41.2% for the ~~quarter by~~first six months of 2002 to 36.6% for the first six months of 2003. As previously disclosed, the Company’s new CMS contracts result in a different relationship between margins and revenue than has applied in the past for the Company’s traditional product business. At the majority of current CMS sites, the Company effectively acts as an agent and records revenue and costs from these sales on a net sales or “pass-through” basis. The new CMS contracts have a different structure that results in the Company recognizing in reported revenue the gross revenue received from the CMS site customer, and in cost of goods sold the third party product purchases, which substantially offset each other. The negative impact on gross margin for the first half of 2003 is approximately ~~$2.0~~2 percentage points. The company expects the negative impact to gross margin in the second half of 2003, related to the new CMS contracts, to be approximately 4 to 5 percentage points. The remaining decline in gross margin as a percentage of sales was due to increased raw material costs, as well as product and regional sales mix. On a full year basis, the Company continues to expect raw material costs to be higher in 2003 versus 2002 in part due to the continued high oil prices. However, the Company also expects raw material prices to be somewhat more favorable in the second half of 2003 versus the first half of 2003.

Selling, general and administrative (SG&A) expenses for the first six months of 2003 increased $2.6 million ~~and $5.6 million respectively. Excluding~~from the ~~impact~~first six months of 2002. Increases due to foreign exchange ~~rate translation~~rates and the timing of the Company’s 2002 acquisitions ~~net sales would have been $65.7 million or 9.6% above the prior year. A Non-GAAP measure of net sales, which excluded the impact of foreign exchange rate translation~~were partially offset by reduced incentive compensation expense and ~~the timing~~cost containment efforts of the ~~Company’s 2002 acquisitions, has been included because~~Company. Consistent with previous guidance, the Company ~~believes it is helpful to~~expects increased SG&A costs for the ~~reader in comparing performance in the current~~full year first quarter to the comparable period in the prior year. Net sales in all regions except Europe increased on a local currency basis demonstrating improvements in both volume and price/mix. Overall, Quaker realized somewhat of a rebound from the softness in the Company’s global markets experienced during the first quarter of 2002.

Cost of sales increased as a percentage of sales from 59.4% in the first quarter of 2002 to 61.3% in the first quarter of 2003. The increase is primarily a result of increased raw material costs and product mix. The Company expects raw material prices to be higher in 2003 ~~especially in the first half,~~partially due to ~~higher oil prices experienced earlier in the year.~~

Selling , general and administrative (SG&A) expenses increased $2.7 million over the first quarter of 2002. Timing of the Company’s 2002 acquisitions and foreign exchange rate translation accounted for approximately two thirds of the increase. As previously disclosed, increased costs ~~such as~~associated with higher pension expense, insurance premiums and the Company’s ERP ~~implementation, accounted for the remaining~~implementation.

~~Other~~The increase in other income ~~variance~~ primarily reflects ~~foreign exchange losses~~a $0.3 million positive income impact related to $4.2 million ($1.8 million received in the first quarter of 2003 ~~compared with gains~~and $2.4 million received in the ~~first~~second quarter of ~~2002. Net interest~~2003) of priority cash distributions received from the Company’s real estate joint venture during 2003. Interest expense is ~~slightly~~ below the prior year primarily due to decreased average debt levels and lower borrowing ~~rates and the impact of principal payments made on~~rates. The decrease in interest income is due to lower interest income from the Company’s ~~higher~~international affiliates. In the first half of 2002, the Company’s Brazilian entity had more cash, which was earning interest at a rate ~~long-term debt. Equity~~of nearly 20%. The Company made a mid-year 2002 decision to repatriate this cash to the U.S. due to the potential for the Real to weaken, which has resulted in decreased interest income in the first half of 2003.

The year-to-date 2003 effective tax rate is ~~higher for~~32% compared to 32% in the prior year and down from 33% in the first quarter of ~~2003~~2003. The decrease in the effective tax rate compared to the first quarter of ~~2002, due to improved results of our real estate joint venture. Minority interest was higher for the first quarter of~~ 2003 ~~compared with the same period last year,~~is primarily due to the ~~purchase~~Company’s favorable settlement of ~~a controlling interest in our South African joint venture, which was effective July 1, 2002.~~

outstanding tax audits and appeal issues related to several foreign subsidiaries. The Company currently expects the effective tax rate will be 32% for the full 2003 ~~is currently 33%, compared to 32% in~~year. However, the ~~prior year. The~~ effective tax rate is dependent on many internal and external factors, and is assessed by the Company on a regular basis.

~~As previously announced~~The increase in equity income for the first six months of 2003 is due to improved results from the Company’s ~~April 11,~~real estate joint venture offset in part by the consolidation of the Company’s South African joint venture effective July 1, 2002 and a weaker performance from the Company’s Venezuelan affiliate. The increase in minority interest was primarily due to the consolidation of the Company’s South African joint venture.

Comparison of Second Quarter 2003 ~~press release, Quaker has been~~with Second Quarter 2002

Consolidated net sales for the second quarter of 2003 were a record $83.5, a 20% increase compared to the second quarter of 2002. Foreign exchange rate translation and the timing of the Company’s 2002 acquisitions favorably impacted second quarter 2003 net sales by $4.2 million and $2.5 million respectively. As noted above, second quarter 2003 sales include $6.7 million from the Company’s recently awarded CMS contracts.

Gross margin as a ~~series~~percentage of ~~multi-year contracts~~sales declined from 41.7% for the second quarter of 2002 to ~~provide chemical management services (CMS)~~34.7% for ~~General Motors Powertrain manufacturing sites. These contracts will be implemented during~~ the second quarter of 2003. The Company’s new CMS contracts negatively impacted gross margin for the second quarter 2003 by approximately 3 percentage points. The remaining decline in gross margin as a percentage of sales was due to increased raw material costs, as well as product and regional sales mix.

Selling, general and administrative (SG&A) expenses for the quarter were essentially flat with the second quarter of 2002. Increases due to foreign exchange rates and the timing of the Company’s 2002 acquisitions were offset by reduced incentive compensation expense and cost containment efforts of the Company.

The increase in other income primarily reflects a $0.3 million positive income impact related to a $2.4 million priority cash distribution received from the Company’s real estate joint venture in the second quarter of 2003. Interest expense is slightly below the prior year primarily due to decreased average debt levels and lower borrowing rates. The decrease in interest income is due to lower interest income from the Company’s international affiliates. In ~~addition, Daimler-Chrysler has also recently awarded~~ the second quarter of 2002, the Company’s Brazilian entity had more cash, which was

earning interest at a rate of nearly 20%. The Company made a ~~CMS contract for its Trenton Engine plant.~~

~~For 2003,~~mid-year 2002 decision to repatriate this cash to the ~~earnings impact~~U.S. due to the ~~new CMS sites is expected~~potential for the Real to ~~be immaterial due to transition and start-up costs, largely~~weaken, which has resulted in decreased interest income in the second ~~quarter. Future profitability~~quarter of 2003.

The effective tax rate for the second quarter 2003 is 31% down from 32% in the second quarter of 2002 and 33% in the first quarter of 2003. The decrease in the effective tax rate is primarily due to the Company’s favorable settlement of outstanding tax audits and appeal issues related to several foreign subsidiaries.

The decrease in equity income for the second quarter of 2003 is primarily due to the consolidation of our South African joint venture effective July 1, 2002 and a weaker performance from our Venezuelan affiliate, offset in part by improved results from the Company’s real estate joint venture. The increase in minority interest was primarily due to the consolidation of the ~~contracts will be based on Quaker’s ability~~Company’s South African joint venture.

In May 2003, the Company acquired a range of cleaners, wet temper fluids and other products from KS Chemie, located in Dusseldorf, Germany for approximately $1.1 million. This acquisition strategically strengthens the Company’s global leadership position as a process fluids supplier to ~~identify and implement cost reduction programs and~~the steel industry. The Company recorded $0.3 million of intangible assets comprised of product ~~conversions. In addition, the new contracts will result in an increased investment of working capital estimated~~line technology to be $4amortized over a range of five to ten years. The Company also recorded $0.7 million ~~although this amount will be dependent on~~of goodwill, which was assigned to the ~~final terms negotiated with suppliers.~~Metalworking process chemicals segment.

~~These new contracts will cause future income statements to show different relationships between margins and revenue than in the past. At the majority of current CMS sites,~~In July 2003, the Company ~~effectively acts as an agent~~acquired all of the outstanding stock of Eural S.r.l., a privately held company located in Tradate, Italy for $5.7 million. Eural manufactures a variety of specialty metalworking fluids primarily for the ~~customer whereby it purchases chemicals from other companies and resells the product to the customer at little or no margin.~~Italian market. The revenue and costs from these sales are reported on a net sales or “pass-through” basis. The structure of the new GM Powertrain site contracts is different in that the Company’s revenue received from the customer will be in the nature

of a fee for products and services provided to the customer, which are indirectly related to the actual costs incurred. As a result, the Company will recognize in reported revenues the gross revenue received from the CMS site customer, and in cost of goods sold, the third party product purchases, which will substantially offset each other. This will result in a significant increase in the Company’s reported revenue, estimated to be approximately $35-$40 million on an annualized basis, income from which will be dependent upon Quaker’s ability to profitably manage these contracts, to identify and implement cost reduction programs and to implement product conversions.

~~In addition, the~~ Company is currently ~~negotiating similar contract structures for some~~assessing the allocation of ~~its existing CMS sites. It is possible that this will also require~~ the ~~Company to recognize an additional $10-$15 million in annualized sales starting in the second quarter.~~purchase price.

The impact on gross margin due to these developments in CMS is estimated to be approximately 4 to 6 percentage points over the next several months. As the Company begins to implement cost reduction programs and product conversions, this should begin to reduce the negative gross margin impact.

(Cautionary Statements Under the Private Securities Litigation Reform Act of 1995)

Certain information included in this Report and other materials filed or to be filed by Quaker with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by us) contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These Statements can be identified by the fact that they do not relate strictly to historical or current facts. We have based these forward-looking statements on our current expectations about future events. These forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, intentions, financial condition, results of operations, future performance and business, including:

Such statements include information relating to current and future business activities, operational matters, capital spending, and financing sources.

The risks and uncertainties that could impact the Company’s future operations and results include, but are not limited to, further downturns in our customers’ businesses, significant increases in raw material costs, worldwide economic and political conditions, ~~the impact of SARS,~~ foreign currency fluctuations, and future security alerts and terrorist attacks such as those that occurred on September 11, 2001. Furthermore, the Company is subject to the same business cycles as those experienced by steel, automobile, aircraft, appliance, and durable goods manufacturers. These risks, uncertainties, and possible inaccurate assumptions relevant to our business could cause our actual results to differ materially from expected and historical results. Other factors beyond those discussed could also adversely affect us. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995.

~~Quantitative and Qualitative Disclosures About Market Risk.~~

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Quaker is exposed to the impact of interest rates, foreign currency fluctuations, changes in commodity prices, and credit risk.

Interest Rate Risk. Quaker’s exposure to market rate risk for changes in interest rates relates primarily to its short and long-term debt. Most of Quaker’s long-term debt has a fixed interest rate, while its short-term debt is negotiated at market rates which can be either fixed or variable. Incorporated by reference is the information under the caption “Liquidity and Capital Resources” in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 8 of the Notes to Consolidated Financial Statements beginning on pages 11 and 33, respectively, of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2002 (the “2002 Form 10-K”). If interest rates rise significantly, the cost of short-term debt to Quaker will increase. This can have a material adverse effect on Quaker depending on the extent of Quaker’s short-term borrowings. As of ~~March 31,~~June 30, 2003, Quaker had ~~$13.2~~$17.1 million of short-term borrowings compared to $9.3 million as of December 31, 2002.

Foreign Exchange Risk. A significant portion of Quaker’s revenues and earnings is generated by its foreign operations.

Incorporated by reference is the information concerning Quaker’s non-U.S. activities appearing in Note 11 of the Notes to Consolidated Financial Statements beginning on page 38 of the 2002 Form 10-K. All such subsidiaries use the local currency as their functional currency. Accordingly, Quaker’s financial results are affected by risks typical of global business such as currency fluctuations, particularly between the U.S. dollar, the Brazilian real and the E.U. euro. As exchange rates vary, Quaker’s results can be materially affected.

In the past, Quaker has used, on a limited basis, forward exchange contracts to hedge foreign currency transactions and foreign exchange options to reduce exposure to changes in foreign exchange rates. The amount of any gain or loss on these derivative financial instruments was immaterial. Quaker is not currently a party to any derivative financial instruments.

Commodity Price Risk. Many of the raw materials used by Quaker are commodity chemicals, and, therefore, Quaker’s earnings can be materially adversely affected by market changes in raw material prices. In certain cases, Quaker has entered into fixed-price purchase contracts having a term of up to one year. These contracts provide for protection to Quaker if the price for the contracted raw materials rises, however, in certain limited circumstances, Quaker will not realize the benefit if such prices decline. Quaker has not been, nor is it currently a party to, any derivative financial instrument relative to commodities.

Credit Risk. Quaker establishes allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of Quaker’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Downturns in the overall economic climate may also tend to exacerbate specific customer financial issues. A significant portion of Quaker’s revenues is derived from sales to customers in the U.S. steel industry where a number of bankruptcies occurred during recent years. In 2000, 2001, and early 2002, Quaker recorded additional provisions for doubtful accounts primarily related to bankruptcies in the U.S. steel industry. When a bankruptcy occurs, Quaker must judge the amount of proceeds, if any, that may ultimately be received through the bankruptcy or liquidation process. As part of its terms of trade, Quaker may custom manufacture products for certain large customers and/or may ship product on a consignment basis. These practices may increase the Company’s exposure should a bankruptcy occur, and may require writedown or disposal of certain inventory due to its estimated obsolescence or limited marketability. Customer returns of products

or disputes may also result in similar issues related to the realizability of recorded accounts receivable or returned inventory. Incorporated by reference is the information under the captions “Critical Accounting Policies and Estimates” and “Liquidity and Capital Resources” in Management’s Discussion and Analysis of Financial Condition and Results of Operations beginning on pages 8 and 11 respectively, of the 2002 Form 10-K.

Evaluation of disclosure controls and procedures. The Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-14(c)), based on their evaluation of such controls and procedures ~~conducted within 90 days prior to~~as of the ~~date hereof,~~end of the period covered by this Quarterly Report on Form 10-Q, are effective to ~~ensure~~reasonably assure that information required to be disclosed by the Company in the reports it files under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

Changes in internal controls. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls, including any corrective actions with regard to significant deficiencies or material weaknesses, subsequent to the date of our most recent evaluation. As previously disclosed, the Company is in the process of implementing a global ERP system. The Company completed its initial implementation of this system in the Netherlands during the fourth quarter of 2002. In the second quarter of 2003, the Company implemented the ERP system in its Spanish subsidiary. During the fourth quarter of 2003, the Company plans to implement the system in its US operations. By the end of 2003, subsidiaries representing more than 50% of consolidated revenue are expected to be operational on the global ERP system. Additional subsidiaries are planned to be implemented during 2004. The Company is taking the necessary steps to monitor and maintain the appropriate internal controls during this period of change.

Items ~~1,2,3,4~~1,2,3, and 5 of Part II are inapplicable and have been omitted.

The 2003 Annual Meeting of the Company’s shareholders was held on May 14, 2003. At the meeting, management’s nominees, Donald R. Caldwell, Robert E. Chappell, William R. Cook, and Robert P. Hauptfuhrer were elected Class II Directors. Voting (expressed in number of votes) was as follows: Donald R. Caldwell, 23,331,952 votes for, 276,622 votes against or withheld, and no abstentions or broker non-votes; Robert E. Chappell, 23,483,314 votes for, 125,260 votes against or withheld, and no abstentions or broker non-votes; William R. Cook, 23,336,380 votes for, 272,194 votes against or withheld, and no abstentions or broker non-votes; Robert P. Hauptfuhrer, 23,493,071 votes for, 115,503 votes against or withheld, and no abstentions or broker non-votes.

In addition at the meeting, the shareholders approved the 2003 Director Stock Ownership Plan by a vote of 21,796,524 votes for, 1,101,170 votes against, 710,880 abstentions, and no broker non-votes.

In addition, at the Meeting, the shareholders ratified the appointment of PricewaterhouseCoopers LLP as the Company’s independent accountants to examine and report on its financial statements for the year ending December 31, 2003 by a vote of 23,347,361 for, 161,498 votes against, 99,715 abstentions, and no broker non-votes.

~~10(pp) – First Amendment between Quaker Chemical~~(a)
~~Corporation and ABN Amro Bank N.V. dated March 25, 2003~~Exhibits.

~~99.2 – Certification of Michael F. Barry Pursuant to~~(b)
~~U.S. C. Section 1350~~

~~No reports~~1. On May 5, 2003 the Company furnished on Form 8-K ~~were filed during the quarter for which this report is filed.~~its First Quarter 2003 Press Release.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~I, Ronald J. Naples, the Chief Executive officer of Quaker Chemical Corporation, certify that:~~

~~I have reviewed this quarterly report on Form 10-Q of Quaker Chemical Corporation;~~

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

~~evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and~~

~~presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;~~

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

~~any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and~~

The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

~~I, Michael F. Barry, the Chief Financial Officer of Quaker Chemical Corporation, certify that:~~

~~I have reviewed this quarterly report on Form 10-Q of Quaker Chemical Corporation;~~

~~evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and~~

~~presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;~~

~~any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and~~

PARTI.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Balance Sheet at ~~March 31,~~June 30, 2003 and December 31, 2002	3

	Condensed Consolidated Statement of Income for the Three and Six Months ended ~~March 31,~~June 30, 2003 and 2002	4

	Condensed Consolidated Statement of Cash Flows for the ~~Three~~Six Months ended ~~March 31,~~June 30, 2003 and 2002	5

	Notes to Condensed Consolidated Financial Statements	6

	2003		2002

Net Income – as reported	$	3,107	$	2,358
Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of tax		489		537

Pro forma net income	$	2,618	$	1,821
Earnings per share:
Basic – as reported	$	0.34	$	0.26
Basic – pro forma	$	0.28	$	0.20
Diluted – as reported	$	0.33	$	0.26
Diluted – pro forma	$	0.27	$	0.20

	2003		2002

Dividend yield	3.9	%	3.9	%
Expected volatility	23.9	%	23.9	%
Risk-free interest rate	3.00	%	3.00	%
Expected life (years)	5		5

	Metalworking process chemicals		Coatings		Total

Balance as of January 1, 2003	$	14,658	$	7,269	$	21,927
Currency translation adjustments		381		—		381

Balance as of March 31, 2003	$	15,039	$	7,269	$	22,308

	Metalworking process chemicals		Coatings		Total

Balance as of January 1, 2003	$	14,658	$	7,269	$	21,927
Goodwill additions		779		—		779
Currency translation adjustments		1,449		—		1,449

Balance as of June 30, 2003	$	16,886	$	7,269	$	24,155

	Three Months ended June 30,						Six Months ended June 30,

	2003			2002			2003			2002

Net Income – as reported	$	3,475		$	3,236		$	6,582		$	5,594
Add: Stock-based employee compensation expense included in net income, net of related tax effects		(23	)		174			152			275
Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of tax		(115	)		(302	)		(334	)		(505	)

Pro forma net income	$	3,337		$	3,108		$	6,400		$	5,364

Earnings per share:
Basic – as reported	$	0.37		$	0.35		$	0.71		$	0.61
Basic – pro forma	$	0.36		$	0.34		$	0.69		$	0.58
Diluted – as reported	$	0.36		$	0.35		$	0.69		$	0.60
Diluted – pro forma	$	0.35		$	0.33		$	0.67		$	0.58



10(qq)	– Credit Agreement between Registrant and PNC Bank, National Association in the amount of $10,000,000, dated June 19, 2003.

10(rr)	– Commercial Note between Registrant and National City Bank, National Association in the amount of $10,000,000, dated June 19, 2003.

31.1	– Certification of Chief Executive Officer of the Company pursuant to Rule 13a-14(a) or rule 15d-14(a) of the Securities Exchange Act of 1934

31.2	– Certification of Chief Financial Officer of the Company pursuant to Rule 13a-14(a) or rule 15d-14(a) of the Securities Exchange Act of 1934

32.1	– Certification of Ronald J. Naples Pursuant to U.S. C. Section 1350

32.2	– Certification of Michael F. Barry Pursuant to U.S. C. Section 1350

			QUAKER CHEMICAL CORPORATION
			(Registrant)
			/s/MICHAEL F. BARRY

Date: August 14, 2003			Michael F. Barry, officer duly authorized to sign this report, Vice President and Chief Financial Officer


~~Date: May 15, 2003~~	~~Signed:~~	/s/ R~~ONALD~~ J. N~~APLES~~

	~~Name:~~	~~Ronald J. Naples~~
	~~Title:~~	~~Chief Executive Officer Of Quaker Chemical Corporation~~


~~Date: May 15, 2003~~	~~Signed:~~	~~/s/~~M~~ICHAEL~~ F. B~~ARRY~~

	~~Name:~~	~~Michael F. Barry~~
	~~Title:~~	~~Chief Financial Officer Of Quaker Chemical Corporation~~