July 21, 2024

Rising Industrial Production in Emerging Nations to Boost Growth of the Global Commodity Chemicals Market

Commodity chemicals include basic chemicals like ethylene, propylene, benzene, ammonia and methanol. They are used as building blocks for various industrial and consumer products. Commodity chemicals are crucial inputs for several industries such as packaging, automotive, construction and consumer goods. Growing demand from end-use industries is driving the need for commodity chemicals. Key product categories include olefins, aromatics and chlor-alkali. Emerging nations are witnessing rapid industrialization which is fueling consumption of these basic chemicals. Asia Pacific dominates global production and consumption owing to presence of major economies like China and India.

The global Commodity Chemicals Market is estimated to be valued at US$ 67.72 Bn in 2023 and is expected to exhibit a CAGR of 6.6% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:
One of the major trends in the commodity chemicals market is the shift towards sustainability and green chemicals. Manufacturers are investing in developing bio-based and recyclable commodity chemicals to reduce fossil fuel dependency and environmental footprint. Eco-friendly products such as bio-based polymers and green solvents are gaining traction. Another notable trend is the rising integration across product value chains through mergers and acquisitions. Big industry players are acquiring smaller firms to expand manufacturing capabilities and geographical reach. Partnerships between chemical makers and end-use sector companies are also increasing for jointly developing new applications. Such strategic moves aim to strengthen market position amid stiff competition.

Porter’s Analysis

  • Threat of new entrants: The commodity chemicals market requires large capital investments and economies of scale to be competitive. These high barriers to entry protect incumbent businesses.
  • Bargaining power of buyers: Buyers have moderate bargaining power. Commodity chemicals are basic materials with many substitutes available, allowing buyers to play suppliers against each other.
  • Bargaining power of suppliers: A few giant corporations control global supply of most commodity chemicals, giving them strong bargaining power over buyers.
  • Threat of new substitutes: Substitutes exist for most commodity chemicals. Continuous R&D has resulted in new substitutes posing threats.
  • Competitive rivalry: Market is dominated by large multinational corporations. Intense competition on pricing keeps margins low.

Key Takeaways

The global commodity chemicals market is expected to witness high growth, exhibiting CAGR of 6.6% over the forecast period 2023 to 2030, due to increasing demand from packaging and construction industries.

Regional analysis: Asia Pacific region currently dominates the commodity chemicals market, accounting for more than 35% of the global market share in 2023. China leads globally both in terms of production and consumption of commodity chemicals. North America and Europe are other major markets, though their growth is expected to be slower than Asia Pacific.

Key players operating in the commodity chemicals market are BASF SE, Dow Inc., SABIC, and LyondellBasell Industries. These companies are investing heavily in expanding production capacities to cater to the growing demand. Partnerships and acquisitions have allowed them to strengthen their foothold in key markets. Cost competitiveness is essential for long term success in this market.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it