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

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Europe: Regulatory Environment Impedes Growth

The European region is important for chemicals such as PVC, TiO2, styrene, butadiene rubber, ethylene copolymers, polyether polyols, and acrylic polymers. The region is also a key supplier of urea, ammonia, benzene butadiene, and para-xylene. The recent downward plunge in oil prices has proven beneficial for the European chemicals industry, which was conceding ground to stronger players in the US and the Middle East.

The loss of energy, cost-competitiveness and the extremely stringent regulatory environment here is gnawing at the European chemicals industry; and this needs to be overcome at the policy level. Germany, the biggest market in Europe, is expected to register 1.5 percent growth in its chemicals industry in 2015.

China: Investor Sentiment to Remain Positive About China

The world’s biggest chemicals market, China has hundreds of small, medium and large companies that supply MEG, PVC, polycarbonates, styrene, polypropylene, caprolactam, PE and polyether polyols. China is a prolific producer of industrial and agricultural chemicals. But as the country’s GDP now struggles to hover above the 7 per cent mark and overcapacity leads to deferred purchase decisions, the basic chemicals industry in China will feel the heat.

Yet, as the market steers towards more technologically-advanced sectors, and moves away from commodity segments, international investors are optimistic about the prospects of the chemicals industry in China.

The agricultural chemicals industry is expected to remain dynamic thanks to the M&A scenario here. China’s automotive market will register an estimated 5 per cent growth per year to 2020, keeping up a steady demand for ancillary chemicals such as synthetic rubber, lubricants, and plastics. With a drop in the construction sector in China, the demand for construction chemicals such as concrete admixtures, asphalt additives, coatings, sealants and adhesives will slow down.

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