Market Movements

Insights into the Global Trends that Shape Tomorrow's Chemical Industry

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The Chemistry Industry Association of Canada estimates that by 2023, the Canadian chemicals industry could see new investments to the tune of $10 billion as the current boom of shale gas proves to be a game changer. Canada will continue to remain a strong contender in the bio-based chemicals trade, thanks to its repository of readily-available biomass feedstock.

Mexico: Rejuvenation Expected with Favorable Hydrocarbon Laws

The country is a vital supplier of polyethylene, para-xylene, styrene, polycarbonates, polypropylene, polyether polyols, and vinyl chloride monomer (VCM). However, growth in the Mexican petrochemicals sector has remained sluggish because investments were few and far between in the Mexican oil and gas industry. But 2014 saw an overhaul of the hydrocarbon laws in Mexico, and this could spur a fresh cycle of growth.

Growth in the Mexican chemicals industry will result from robust demand from three industries: Automotive, plastics, and agriculture. The Etileno XXI project—a mega petrochemicals complex in Mexico slated to begin operations by the end of 2015—will help close the current polyethylene production gap.

Brazil: Unattractive Market Scenario to Keep M&As on Hold

Brazil is regarded as a key supplier of styrene, polyether polyols, sodium hydroxide, and diammonium phosphate (DAP). However, the weakness in the Brazilian economy is already having a cascading effect on the chemicals industry. Major end-used industries such as housing and automotives are finding it increasingly difficult to shake off the effects of the slump.

The market for construction chemicals, especially, looks uninspiring over the next few years (despite the 2016 Olympics Games in Rio). The attractiveness of the Brazilian chemicals industry is currently low, and this will impact M&A activity over the remainder of the decade.

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