Home Industry Reports Custom Research Blogs About Us Contact us

Navigating the Global Chemical Industry Outlook 2024: Challenges & Opportunities

Published Date: Feb-2024

The worldwide chemical industry, with a market value in the trillions of dollars, is one of the biggest and most varied industries. Over time, it has grown steadily due to a number of causes, including population increase, urbanisation, industrialization, and developments in technology. The worldwide chemical industry is estimated to be worth over $5 trillion in 2020 and is predicted to increase at a compound annual growth rate (CAGR) of about 3-4% over the ensuing years. Predictive maintenance is made possible by the adoption of digital technologies like blockchain, AI, and IoT, which are streamlining production procedures and increasing productivity. Higher-margin speciality chemicals are gradually becoming more prevalent due to innovation, customisation, and niche uses.


Demand Drivers: Energy transition drives chemical demand

Specialty chemicals and materials are needed for the growing use of renewable energy technologies like solar photovoltaics (PV), wind turbines, and energy storage systems. Materials found in solar panels include silicon, polymers, and speciality compounds such as copper indium gallium selenide (CIGS) and cadmium telluride (CdTe). The demand for these materials is being driven by the manufacturing and installation of solar panels. Lithium-ion batteries, which are utilised in energy storage systems, electric vehicles (EVs), and grid-scale storage solutions, must be produced using lithium compounds and other speciality chemicals.


The demand for electric vehicles (EVs), heat pumps, electric furnaces, and other electrified technologies is rising as a result of the shift to electrified transportation, heating, and industrial operations. The demand for lithium, cobalt, nickel, and other materials required in the creation of batteries rises along with the demand for electric vehicles and energy storage devices. Specialty chemicals, lubricants, and insulation materials are needed in the manufacturing of electric motors, generators, transformers, and other electrical components. In order to produce hydrogen, ammonia, synthetic fuels, and other low-carbon energy carriers and feedstocks, chemical catalysts and process technologies are essential.


Demand for chemicals that increase sustainability, lower emissions, and improve energy efficiency is also being driven by the energy shift in a number of industries. Mineral wool, polystyrene, and polyurethane foams are examples of high-performance insulation materials needed for energy-efficient infrastructure and structures. Lightweight materials including carbon fibre composites, aluminium alloys, and high-strength steels are being used more often by automakers to cut emissions and increase fuel economy. Refinery, petrochemical, and manufacturing processes can all be made more environmentally friendly and energy-efficient by utilising chemical catalysts, additives, and process intensification technologies.


Regional dynamics: Regional competition heats up, driven by commodity prices, policies, and supply chain concerns of Chemical Industry

Commodity Prices

Price fluctuations for commodities, especially raw materials like oil, natural gas, and agricultural products, can have a big effect on how competitive chemical producers are in different parts of the country. In the production of petrochemicals, regions like the Middle East and North America (such as the U.S. Gulf Coast) that have access to plentiful and reasonably priced feedstock frequently enjoy a competitive edge. Lower production costs might result from lower feedstock prices, making it more difficult for rivals in other areas to compete on price. Specialty chemical synthesis requires a wide variety of intermediates and basic ingredients. Specialisation and niche markets may be made possible by regional differences in the cost and availability of feedstocks for specialised chemicals.

Supply Chain Concerns

Chemical producers' ability to compete may be impacted by supply chain factors such as resilience, infrastructure for logistics, and transportation costs. In terms of logistics and supply chain effectiveness, areas with strong transportation infrastructure and easy access to large markets may have a competitive edge. Businesses are reevaluating their supply chain strategy and placing a higher priority on resilience due to worries about natural catastrophes, geopolitical risks, and supply chain disruptions. To increase supply chain visibility and agility, this entails reshoring production, diversifying your suppliers, and spending money on digital technologies.

Demand Growth

The demand for chemicals is rising due to rapid industrialization, urbanisation, and population increase in emerging economies, especially in Asia-Pacific and Latin America. Investments in R&D, innovation ecosystems, and technology infrastructure may provide regions with a competitive edge in the creation and marketing of novel chemical products and procedures.


The prospects for the chemical industry in 2024 present a careful balancing act between possibilities and challenges. Global dynamics, which include abundant supply, fluctuating competitive environments, and poor demand, provide formidable obstacles. Businesses navigating these challenges need to concentrate on cutting expenses, increasing productivity, and making smart investments in order to set themselves up for success in a setting that is changing quickly.

Author: FBI