Chemical Market Research

The Chemical Industry plays an integral role as a part of the Global Economic Landscape. The Global GDP contribution of the Chemical Sector is recorded to be USD 1.1 Trillion as of 2017. Industry accounts for 7% of the Global GDP.  It is the 5th largest manufacturing sector globally. In terms of Chemical sales, the APAC chemical industry is the largest market followed by Europe and the United States.

The chemical sector supports 120 jobs globally. The Chemical industry employs 13 million people directly. This in turn increases the purchasing power of the employed population and hereafter increases the GDP contribution. The chemical materials manufacturing sector is highly productive with USD 75,000 GVA produced per employment. The industry pays over USD 300 Billion in wages and salaries. Out of this value, USD 200 Billion of consumer spending is injected into local economies across the world each year.

Moreover, the employment ratio for direct to indirect jobs within the chemical industry is recorded to be 1:7. For every job created in the chemical industry, 7 additional jobs are created elsewhere within the economy. This is a direct impact of the growth in the supply chain owing to the increased investment in chemical materials and services with increased demand.

 The rising purchasing power of the population and the growth in employment generation globally are two of the key factors that account for the market expansion. The increased industrialization in growing economies like China, India, Indonesia, etc is also expected to bolster the trends of this market.

The Chemical Sector plays an integral role in the generation of skilled employment globally. It supports a substantial amount of jobs and economic activity on a global scale.

Sustainability is one of the key trends that is expected to bring about a shift in market dynamics across the Chemical Sector. The Progress of the Chemical Industry towards attaining the United Nation’s 17 Sustainable development goals is expected to bolster the change in the market environment. The Chemical Sector on a global scale is trying to imbibe healthy practices and technologies. The adoption of green technology ensures the inception of a global circular economy.

As of 2017, the investment across the Global Chemical Industry was recorded to be USD 51 Billion. The increased investment in segments green alternatives to existing market solutions is expected to stunt the growth associated with petroleum-derived industries.

The commodity chemicals or the bulk chemicals market is another sector that is expected to register marginal growth within the chemical industry. Segments like petrochemicals account for a major share of this market. Petrochemicals are anticipated to experience a huge plummet in demand owing to the imposition of regulations that support the adoption of green alternatives. Industries across the world are implementing measures like recycling plastic, re-use of plastic material, and recycling of plastic numbers. On a B2C and B2B level, consumers are adopting measures like recycling of plastic bottles and cover plastic to reduce plastic waste.

As a direct impact of the government norms that are focused on reducing the carbon footprint, the investment in organic chemicals is expected to decrease. Consequently, the investment associated with inorganic chemicals, renewable chemicals, and organic alternatives to agrochemicals is anticipated to increase.

Biochemistry is another sector that is expected to be one of the fastest-growing verticals within the Chemical Industry. The growth in demand for Polymerases across the world is one of the key drivers for the life science market.

North America Chemical Business:

The United States and Canada are two of the key economies within this region that promote the growth of the Chemical Sector. As of the year 2018, the chemical industry accounts for roughly 18% of the US manufacturing economy. As of 2021, it was recorded that the US was valued to hold an 18% share in the Global Chemical Shipments. The US is home to 130,000 chemical companies and produces 70,000+ products.

In the year 2017, it was recorded that the US Chemical Industry had a final sales value of USD 765 Million. The industry employed 529,000 workers directly. The indirect employment includes the participants of the US supply chain for this market. As of 2017, indirect employment within the US recorded a value of USD 1.8 Million. The total FDI associated with this sector surpassed a value of USD 700 Billion in the same year. The industry has an output of roughly USD 750 Billion per year. In terms of Patent Intensity, the US Chemical Industry is characterized as above average.

The petrochemicals industry within China is one of the oldest sectors. The oils works of Abraham Pineo Gesner are considered to be the first trace of the petrochemicals market. As of 2017, the Canadian chemical sector exported chemical materials and products worth a value of USD 35 Billion. The chemical sector within Canada is majorly reliant on crude and natural gas processing. Thus the petrochemicals division accounts for a major share of the commodity chemicals market within Canada. Between the years 2010-2015, the Canadian chemical industry witnessed a growth in the number of establishments from a value of 2730 to 3205.

As of 2020, COVID-19 is one of the key parameters that influences the market trends associated with the Global economy. The global economy witnessed a marginal depression this year followed by a drop in GDP between the years 2008-2009. As of 2020, the US chemical output fell by a value of 3.6%. While the 2019 sales reduced by a value of 0.1% as compared to 2018. The Specialty Chemicals market in the US shrank by a value of 10.8%. As of 2019, this industry recorded a growth of 2.5%. Due to the exceeding number of layoffs, the US economy is short of 14,000 chemical jobs as compared to 2019.

The growth in car manufacturing and vaccine rollout is expected to be two of the key drivers for the US Chemicals Market. The chemical volumes are expected to grow by a value of 14% and 3.2% in the years 2021 and 2022. The specialty Chemicals volume is poised to increase by a value of 2.4%, and the demand for commodity chemicals is to increase by roughly 5%. As of 2021, US manufacturers are expected to experience a plummet in the prices of natural gas. This depletion in value is expected to promote natural-gas-based petrochemicals manufacturing within the US. Shale oil is another key contributor to the petrochemicals market in the US.

Europe Chemical Business:

The Sales for the EU Chemical Industry were recorded to attain a value of USD 639.72 Billion as of 2019. Since the year 2009, the sales for the EU’s chemical sector have been the highest in the year 2019. Intra-EU sales grew by a value of roughly 68% between the years 2009-2019. The removal of both trade and non-trade barriers within the EU helped accelerate the market growth within this sector. The increased number of chemical transport operations across the border has helped boost the supply chain margins for the EU’s Chemical Industry, thus boosting the competitiveness of the market.

As of 2019, EU’s domestic country-wise sales reduced by a value of roughly 20%. The revenue generated via home sales was reduced by a value of 2% per annum. The EU chemical sector is majorly an exports oriented market. Roughly 32% of the chemical materials production is exported to countries outside of the EU. Between the years 2009-2019, the market registered a growth in value by 60%. A sale of approximately 208.53 Billion was generated via exports.

Germany and France are two of the key chemical suppliers within Europe. Germany accounted for 28.9% of the sales generated within this market, followed by France (14.9%) and Italy (13.3%). On covering the competitive landscape of this market, it can be observed that Germany, France, Italy, and the Netherlands cumulatively account for 67.9% of the revenue generated. The sales for UK’s

The chemical sector reached a value of USD 40.17 Billion in 2019. Roughly 67% of the chemical production is exported from the UK to EU27. Moreover, on making a trade-based analysis, the chemical exports to the UK attained a value of USD 28.75 Billion. Moreover, the imports from the UK to EU 27 were valued at USD 24.62 Billion as of 2019.

On making a segment-wise analysis, the Rubber and Plastics vertical held a major market share with a value of 15.5%. This is predominantly due to the mature crude industry within the EU. Thus petrochemicals and other crude-based derivatives account for a major share of the commodity chemicals market within the EU. The European Chemical sector provides direct employment to roughly 1.2 million people. According to the multiplier effect, the growth in employment generation is expected to bolster the spending capacity of the consumers. This in turn would promote economic growth within Europe.

More than half of the EU Chemicals produced are sold to downstream industries. Therefore, the intermediate product market governs a marginal share of the chemical sector.

Middle East Chemical Business:

The Middle East has vast reserves of petrochemicals. Therefore, the chemical materials market is highly reliant on petroleum-derived products. Some of the key segments of this market include Base Oils, Plastic/Polymers, and Polyurethane. As of the year 2019, the Middle East base oils market was oversupplied. Moreover, the demand for this market was sluggish this year.

The Asia/Middle East alkyl benzene market is expected to merge in the coming years. This is mainly due to the uncertain upstream crude as well as benzene values. The Polyethylene vertical is a key segment within the Middle Eastern Petrochemicals Market. As of 2018, the demand for Petrochemicals was sluggish owing to the rapid change in trends across the global markets. The exceeding adoption of green alternatives serves as a key restraint for this vertical.

Measures like recycling of plastic, recycling of plastic bottles, and re-use of cover plastic have marginally reduced the production of petrochemicals like polyethylene. As of 2018, the lower crude oil prices reflected on the Middle Eastern economy since many countries are heavily reliant on the exports of the same. Green energy and alternative sources of power have hereafter restricted the market growth for petroleum-derived products in the Middle East.

As of 2019, the processors in Saudi Arabia witnessed the introduction of Value Added Tax (VAT). The inclusion of this tax led to an increase in the cost of products and services within this region. The Saudi Expat Tax which was launched as a part of the non-oil government revenue hampered the demand for finished goods in the year 2018. As a result, the industrial packaging segment (an integral part of the petrochemicals market) witnessed sluggish demand in the year 2018-2019. Although the demand for packaging material across the food and beverage segment remained largely stable.

The recycling of plastic and other petrochemical-derived packaging chemical materials is expected to reduce the demand across the packaging market. The use of biodegradable alternatives is anticipated to lower the demand and production margins for the petrochemicals sector.

The growth in population density within this region and the expanding working class are two of the key drivers for the Middle Eastern Chemicals Market. The petrochemicals market is one of the key contributing factors to the Middle Eastern economy. Petrochemicals within this region are majorly derived from natural gas. Therefore, the competitiveness for low-cost natural gas-based products has increased as per global standards. This is predominantly due to the vast reserves of shale oil in regions like the US. Shale oil serves as an enabler for low-cost natural gas which in turn helps propel the growth of the global economy.

As of 2021, markets like China are trying to establish their footprint in the polyethylene and polypropylene markets. Therefore, with the change in market trends-the Middle Eastern Petrochemicals and Refinery division might have to seek new export markets.

Rest of the World:

As of the year 2021, Asia Pacific was recorded as the largest market for Chemicals. Crude to chemicals is one of the upcoming verticals within South East Asia. The glut in oil prices and the growing demand for petrochemicals is expected to accelerate the growth in the crude to chemicals market. The market for crude to chemicals is expected to grow with a compounded growth rate of 4-5%.

Asia is one of the fastest-growing economies globally. Asia is the largest market for specialty chemicals and the region accounts for 36% of the worldwide specialty chemicals market. The region launched a chain of integrated petrochemicals and refinery investments between the years 2014 and 2015 post the collapse of oil prices. China is one of the key markets within this region. The low cost of labor within this region main driver for this market.

Across the world, Latin America is another key market for Chemicals. Brazil is one of the key economies within this region. Between the years 2000-2008, the GDP for South America grew by a value of roughly 3.4%. The region has a highly fragmented chemical industry. The low commodity prices within Latin America are anticipated to result in an increased number of Mergers and Acquisitions. The open borders and the competitive economies of scale are expected to bolster the growth rate across this market.

Sub-segments of Chemical Market

Agrochemicals

Bulk Chemicals

Speciality & Fine Chemicals

Life science Chemicals

Consumer Product Chemicals

Advanced Material

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