Global Chemical Industry Outlook, 2024

Global Chemical Industry Outlook 2024

The global chemical industry was estimated to be worth USD 6.0 trillion in 2023, witnessing a CAGR of 2 % from USD 5.9 trillion in 2022. While the total demand for chemicals was almost stable in 2023, the demand for chemicals and materials needed to support the energy transition is expected to rise in 2024 and beyond as the impact of new government policies and incentives policies reverberates through the economy.?

The chemical industry 2024 landscape is evolving rapidly, with a noticeable uptick in the development of sustainable and eco-friendly solutions, aligning with global initiatives for environmental stewardship. Additionally, the recovery from the economic repercussions of the COVID-19 pandemic has catalyzed demand across various sectors, including automotive, construction, and electronics.

Regional Dynamics:

APAC Accounted For The Largest Share of the Global Chemical Industry Growth

In 2023, the Asia-Pacific (APAC) region emerged as the largest chemical market, experiencing a robust growth rate of 4.0% in market size compared to 2022. Conversely, Europe witnessed a modest 1% growth despite declining regional production. Increased imports from interregional countries like China and India offset this decline. Notably, chemical production volumes in Europe took a hit, plummeting by 6.6% in 2023, with a fragile recovery projected for 2024.

China's Resilience:

China's chemical production showcased resilience, primarily driven by domestic demand. Predictions indicate a 6.9% increase in output for 2023, followed by a 5.2% uptick in 2024. Despite challenges stemming from sluggish growth in the property sector, strategic policy measures aim to stimulate growth in pivotal sectors like construction and automotive, bolstering the industry's trajectory in the region.

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Chemical Industry Growth 2024: Market Dynamics

Growth Factors: Decarbonization of Supply Chain

According to the Chemical Industry Outlook 2024 report, the chemical industry is poised to witness a significant trend as it strives to decarbonize supply chains, responding to a global imperative to reduce carbon emissions and foster sustainability. Key developments and expectations for the year include:

Advanced Technologies Investment: Around 50% of supply chain organizations in the chemical industry are expected to invest in artificial intelligence and advanced analytics applications.

Electric Vehicles and Transport: Sales penetration of battery electric commercial vehicles (BECVs) is projected to reach 15%-34% in 2024, aiding transport sector decarbonization.

Renewable Energy and Clean Technology: Investment in clean energy technologies is anticipated to increase by 15% in 2024, focusing on decarbonization and low-carbon electricity resources.

In 2024, sustainability and decarbonization efforts are becoming paramount for technology companies, driven by pressure from customers, shareholders, and regulators for more sustainable products and services. Consequently, many tech companies are setting ambitious emission reduction goals, although only half report being on track to achieve them. These trends reflect the growing importance of sustainability within the chemical industry 2024, influencing its strategies and practices.

Growth Factors: Development of Smart Materials

The chemical industry growth 2024 is fueled by advancements in materials science, revolutionizing industrial applications. Tailored characteristics address specific needs, with smart materials emerging, responsive to external stimuli. These materials offer diverse features like thermo-, electro-, and photo-chromism, piezoelectricity, and self-healing.

German startup Memetis specializes in ultra-compact actuators utilizing shape memory alloys, capable of enduring significant deformations. Meanwhile, Sorex Sensors, a UK-based startup, pioneers high-sensitivity MEMS sensors on silicon wafers, leveraging thin-film piezoelectric material and FBAR technology to induce piezoelectric effects. These innovations contribute to the chemical industry's growth in 2024.

Challenges: Excess manufacturing capacity in China poses a risk to global green goods trade

Increased petrochemical production in China and the US has led to a global surplus of industrial chemicals for plastics, lowering the cost of new materials and making recycled alternatives less attractive. China's economic policies and the US shale gas boom drove this surge, with China alone contributing 60% of the capacity rise in 2023.

The decline in virgin plastics costs poses challenges to reducing single-use plastics and meeting regulatory goals, hindering efforts to tackle plastic waste pollution. The petrochemical industry globally must address uncompetitive assets and halt unnecessary projects to balance supply and demand. China's surplus has driven down prices, giving manufacturers a competitive edge over Europe. The increased Asian exports to Europe, facilitated by improved logistics, further depress European prices.

Opportunity: Industry 5.0 is expected to create sustainability in the chemical value chain.

The Chemical Industry Outlook 2024 highlights Industry 5.0, emphasizing human-centricity, sustainability, and advanced technology integration. Industry 5.0, an evolution from Industry 4.0, stresses synergy between humans and machines for sustainable growth. It underscores economic progress in the chemical industry while prioritizing worker well-being and addressing climate change concerns.

This shift in the chemical value chain prompts manufacturers to reassess technology implementation and prioritize planet-centric initiatives. In 2024, they focus on assessing progress toward sustainable growth, identifying cost reduction opportunities, enhancing product quality, and strategically aligning with sustainability goals and net-zero carbon emissions targets.

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Global Chemical Industry Trends 2024

Attractive Opportunities In The Global Chemical Industry Trends 2024

Green Energy:

Renewables are projected to constitute over one-third of the world's power supply in 2024, with enough capacity to meet rising electricity demand. Positive developments include China's expected decline in CO2 emissions, driven by record installations of low-carbon energy sources like wind and solar. Globally, factors such as lower production costs, climate change concerns, evolving energy policies, and investor pressure on ESG policies are propelling the renewables sector.

3D Printing:

In 2023, industrial additive solutions saw modest growth initially but gained momentum in the fourth quarter as customers utilized end-of-year budgets and planned for 2024. Robust growth in 3D printing is anticipated for the upcoming year, driven by mass customization fueled by technological advancements.

Integration of 5G with 3D printing processes will streamline workflows, while lower-cost desktop solutions will expedite adoption. Global leaders introducing new products and services will further stimulate market growth.

Use Of Lightweight Materials In Next-generation Vehicles:

The automotive industry anticipates significant growth in the use of lightweight materials, including advanced composites, high-strength steel, and aluminum alloys, in next-generation vehicles. The automotive lightweight materials market is forecasted to reach USD 101.5 billion by 2027, with a CAGR of 6.5% from 2022-2027.

Advancements in the mobility sector are poised to usher in the era of autonomous travel. Vehicle OEMs like BMW and Mercedes-Benz are set to offer Level 3 autonomous driving in specific regions, driving the demand for lightweight materials.

Beyond terrestrial transportation, autonomous mobility is expanding to the skies. Paris is slated to introduce electric air taxi services for the 2024 Olympics, marking the initial steps towards aerial autonomy. While initial flights will have pilots, Volocopter aims to transition to fully autonomous air mobility, with the VoloCity aircraft designed to eventually operate as an autonomous air taxi.

Major Disruptions In Chemical Industry In 2024

• Energy transition and need for high energy density in automotive and other industriesTo increase energy density and lower cobalt content and BOM cost, Ni-shares are constantly increasing, which shifts the demand from LiCO3 precursor towards LiOH.
• Growing demand for fuel cell electric vehicles (FCEVS)High investment from OEMs and fuel cell manufacturers to improve overall efficiency of vehicles. Development of new FCEV model with improved range.
• Rising demand for lightweight, high-performance materialsCarbon fiber-reinforced plastic materials offer significant weight reduction and improved strength-to-weight ratio compared to traditional materials like aluminum and steel, making them ideal for aerospace, defense, and wind energy applications.
• Growth for sustainable fuel sourceThe urgency to address climate change and reduce greenhouse gas emissions is intensifying globally. Governments, businesses, and individuals are increasingly seeking sustainable solutions. Biofuels and synthetic fuels offer promising alternatives to fossil fuels.
• DigitalizationAs smart technologies and digitalization continue to evolve, the water treatment industry is transitioning from a reactive model to a proactive and predictive one, ensuring sustainable water management practices that are efficient, resilient, and capable of meeting the challenges of the future.

Global Chemical Industry Outlook, 2024- Key Market Players

The top chemical industry companies include 巴斯夫 SE (Germany), 陶氏化学 Inc. (USA), Saudi Basic Industries Corporation (SABIC) (Saudi Arabia), 埃克森美孚 (USA), Royal Dutch 壳牌 (Netherlands/UK), 杜邦 (USA), LyondellBasell ndustries (Netherlands/USA), Mitsubishi Chemical Group (Japan), INEOS (Switzerland/UK), Sumitomo Chemical Latin America Ltd. (Japan), LG Chem (South Korea), Formosa Plastics Group , U.S.A. (Taiwan), 拜耳 AG (Germany), Chevron Phillips Chemical Company LLC (USA), 液空 (France), 阿克苏诺贝尔 N.V. (Netherlands), Eastman Chemical Company (USA), 赢创工业集团 Industries AG (Germany), and others. Continuous developments in the market, including new partnerships, mergers and acquisitions, agreements, and expansions, are expected to help the market grow. Leading chemical manufacturers have opted for investment and expansion to sustain their market position in 2023.

Major Disruptions In Chemical Industry In 2024

• Energy transition and need for high energy density in automotive and other industries To increase energy density and lower cobalt content and BOM cost, Ni-shares are constantly increasing, which shifts the demand from LiCO3 precursor towards LiOH.
• Growing demand for fuel cell electric vehicles (FCEVS) High investment from OEMs and fuel cell manufacturers to improve overall efficiency of vehicles. Development of new FCEV model with improved range.
• Rising demand for lightweight, high-performance materials Carbon fiber-reinforced plastic materials offer significant weight reduction and improved strength-to-weight ratio compared to traditional materials like aluminum and steel, making them ideal for aerospace, defense, and wind energy applications.
• Growth for sustainable fuel source The urgency to address climate change and reduce greenhouse gas emissions is intensifying globally. Governments, businesses, and individuals are increasingly seeking sustainable solutions. Biofuels and synthetic fuels offer promising alternatives to fossil fuels.
• Digitalization As smart technologies and digitalization continue to evolve, the water treatment industry is transitioning from a reactive model to a proactive and predictive one, ensuring sustainable water management practices that are efficient, resilient, and capable of meeting the challenges of the future.

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