Commodity chemicals form the basic building blocks for a wide range of derivative products used across numerous industries. Commodity chemicals such as ethylene, propylene, benzene, methanol and xylenes are used as intermediates in the production of plastics, fibers, rubbers and numerous other chemical derivatives that go into the making of innumerable everyday products. The growing construction industry has fuelled the demand for various materials such as plastics, paints, cement among others which depend on commodity chemicals. The rising infrastructure development activities together with growing population have positively impacted the construction industry worldwide. The global Commodity Chemicals Market is estimated to be valued at US$ 67.72 Bn in 2024 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 key trends witnessed in the commodity chemicals market is the shift towards renewable feedstock. Growing concerns regarding environmental pollution coupled with volatility in crude oil prices have prompted research focusing on developing techniques to produce basic chemicals from renewable sources such as agricultural waste, forest waste and algal biomass. For example, ethylene, propylene and other basic petrochemicals can be produced from biomass derived sugars through fermentation. Several companies are investing in pilot and demonstration plants to scale up renewable chemical production technologies. This shift towards renewable feedstock is expected to gather further momentum over the forecast period thereby opening up new growth avenues in the commodity chemicals market.
- Threat of new entrants: The threat of new entrants is moderately low in the commodity chemicals market as it requires high capital investments to build production facilities and establish distribution channels.
- Bargaining power of buyers: The bargaining power of buyers is moderately high in this market as commodity chemicals have many substitutes. Buyers can choose from a variety of producers.
- Bargaining power of suppliers: The bargaining power of suppliers is moderately low due to the fragmented nature of raw material sources for commodity chemicals.
- Threat of new substitutes: The threat of new substitutes is moderate as commodity chemicals have application across various end-use industries like plastics, construction, automotive, etc.
- Competitive rivalry: Competition in the commodity chemicals market is high among major players like BASF, Dow, SABIC, and LyondellBasell.
The global commodity chemicals market is expected to witness high growth over the forecast period of 2023 to 2030. The market size is projected to reach US$ 67.72 Bn in 2024, growing at a CAGR of 6.6% during the forecast period.
Regional analysis: North America dominates the global commodity chemicals market and is expected to maintain its leading position over the forecast period. This can be attributed to the presence of major commodity chemical producers in the region. The Asia Pacific region is also expected to grow at the fastest CAGR during the forecast period due to rapid industrialization and rising demand from end-use industries in China and India.
Key players: Key players operating in the commodity chemicals market are BASF SE, Dow Inc., SABIC, and LyondellBasell Industries. BASF SE is one of the leading players in the market with a global production network and broad product portfolio. Dow Inc. offers a wide range of commodity chemicals for various applications.