Bulk chemicals

Bulk chemicals Market Analysis

Bulk chemicals are also known as commodity commodities or basic chemicals. They are raw materials that are typically produced on a large scale to hereby satisfy global market demands. These products are majorly used as intermediate chemicals which in turn produce a wide range of consumer-based products. Commodity chemicals account for a major segment within the chemical sector. The segment is sub-segmented as Petrochemicals, Polymers, etc.  

The product differentiation between these chemicals is extremely low because of which the growth of this market is highly price sensitive. The value chain for this segment includes markets like construction, apparel, tires, etc.  The widespread applications of this market hereafter propagate a wide range of direct, indirect as well as induced jobs into this sector. Increased employment is hereafter expected to bolster the growth of the commodity chemicals market.

Some of the key players of this market include BASF, Bayer AG, etc. The reports under the commodity chemicals market research forum are focused on providing a competitive mapping with respect to the global DRC’s. Chemical Market Forecast aims at providing an adept scenario analysis based on the upcoming opportunities and challenges within this market.  

North America Bulk chemicals Market Analysis

A confluence of factors is expected to accelerate the North American Chemical sector. The growth of this industry is relative to the overall economy associated with NA during the coming 5-10 years. The key players of this market include Dow Chemical Company, Albemarle Corporation, Huntsman International LLC, etc. 

Factors like the availability of low-cost natural gas and natural gas liquids (NGLs) drove the fundamental economics associated with the U.S based chemical industries. The rise in the availability of these products was due to the increase in shale oil production within the American market. In early 2015, the U.S announced a capital investment worth over USD 130 Million for the production of Shale gas. 

A few segments of the commodity chemicals market, such as bulk polymers experienced benefits associated with the rebalancing of the supply chain. Polymers experienced benefits both on the supply as well as the demand side. On the contrary markets like bulk, petrochemicals experienced profit from the supply side. The feedstock advantage felt by the North American sector is unlikely to be affected by the variance associated with crude oil prices.  

Other factors like COVID-19 is expected to act as a key restraint for this market. The chemical volume production by year is expected to decrease by 7-9 percent due to the pandemic. Taking into account a pessimistic outlook, if the number of cases for COVID increases- the market is expected to recede by a value of roughly 15%. On the contrary, the optimistic scenario states a decline in economic activity by 7%. The capital spending associated with the chemical sector is expected to decline by 17-19% to a value of approximately USD 29 Billion. The market is poised to experience a sharp decline before rebounding in the year 2021. A V-shaped return is anticipated. 

Due to the economic downturn associated with the pandemic, the chemical industry is likely to experience a decrease in employment. Roughly 20,000 job cuts are estimated within this industrial sector. On a comparative year-on-year basis, employment is expected to decrease by 3-4 percent.

One of the major factors that add to the decline of the U.S commodity chemical sector includes the changing dynamics with respect to automotive sales. The sales associated with vehicles are expected to reduce by 20-22 percent in the year 2020. Since the consumption of oil decreases, the drilling activity for the production of oil field chemicals is also expected to reduce. Although the use of polyethylene and polypropylene for the fabrication of masks is expected to act as an advantage for the US Chemical sector. 

On a holistic scale, the market is expected to boom with the growth dynamics of 12-14% approximately. 

According to bulk chemicals market research reports,  reduced prices of inputs offer a feedstock advantage. This factor is hereby expected to benefit producers of ethane derivatives such as ammonia, methanol, etc. Owing to the availability of shale oil resources, ethylene-based production has served as a more advantageous route as compared to naptha-based production.  

U.S Steam crackers are expected to shift to ethane as a feedstock. Therefore, the availability of Naptha based products as well as byproducts has declined. The availability of this shale oil over this geographic spread has led to the induction of a cost optimum raw material. The value chain for ethylene is hereby expected to benefit from the low cost linked to this material. Additionally, a decrease in the availability associated with Naptha by-products is hereby likely to reduce the production of BTX and aromatics. In turn, the price associated with these products increases. 

The Canadian chemical industry caters to shipments and exports worth USD 19 billion and USD 13 billion respectively. Ontario serves as the largest manufacturing segment within this region On a petrochemical front, Ontario offers direct access to heavy as well as light crudes. The area is rich in reserves of natural gas in both wet as well as a dry state. NOVA Chemicals is the first company in the world to access Marcellus basin shale gas liquids as feedstock. The company has modified its plant to ethylene cracker plant to handle up to 100% natural gas liquids. Ontario is also home to the Union Gas Dawn Facility, the third-largest natural gas trading hub in North America. It is also the largest underground natural gas storage facility in Canada.

Europe Bulk chemicals Market Analysis

The chemical industry is one of Europe’s largest manufacturing sectors. It acts as a key enabling industry that facilitates growth in terms of providing material as well as technology solutions to Europe’s industrial competitiveness. The rapid increase in costs associated with raw materials and global competitiveness is expected to restructure the growth.

The competitiveness between the key players of the European market is expected to aid technological advancements. The growth of this sector is also anticipated to act as a factor that generates employment and improves living standards. On a holistic scale, the chemical industry contributes to 7.5% of EU manufacturing in terms of turn over. In the year 2018, the industry accounted for roughly 17% of global sales. According to CEFIC, the sales associated with the EU Chemical sector amounted to USD 664.89 Billion in 2018.

In terms of employment, chemical industries contribute to the economy based on the culmination of both direct as well as indirect jobs. In the year 2015, the chemical sector generated 1.5 Million direct jobs, most of which were skill-intensive profiles. The industry created an estimate of 3.6 Million indirect jobs that further induced and supported 19 million jobs across the value chain. Additionally, the labor productivity of the EU is estimated to be 77% higher as compared to the manufacturing average. In the year 2018, the EU generated a trade surplus of roughly USD 45 Billion. Roughly 56% of the EU chemicals sold to downstream users are employed by the industrial sectors. Cooperation between chemical industries and other commercial products has led to an increase in manufacturing-based jobs.

Cross collaboration of technologies and the evolution of new products is expected to accelerate the growth associated with the commodity chemicals market. Additionally, since commodity chemicals are produced in bulk, optimization in terms of time required for production is important. Modular plants have shorter lead times associated with material processing. The time-lapse between material processing and supply to the market is hereby reduced through the induction of this technology. The use of machinery like microreactors is also prevalent within this region. These equipment facilitate large scale production while keeping environmental regulations in check.

The imposition of environmental regulations acts as one of the key factors that modify the growth of this market.  The European Chemicals Agency (ECHA) imposed regulations REACH and CLP. ECHA makes sure that industrial organizations comply with the environmental standards that are imposed. These regulations cater to the health and well being of both the staff as well as people living near industrial areas. The effluents released into the atmosphere are hereby monitored by industries. Therefore, technologies like scrubber systems are used to remove the toxins from the released gaseous stream. Effluent Treatment Plants (ETPs) have also been established to treat water bodies. Other technologies like Air handling units (AHU) and HVAC filter-based systems are also introduced into plant operations.

The German chemical industry is the largest chemical industry that exists within Europe. It is the fourth largest chemical industry worldwide. In the year 2018, the chemical sector attributed to a GDP growth percentage of 1.5%. The average growth over the past year is accounted for to be 1%. According to chemical market reports, for the year 2018, the turnover was reduced by a value of roughly 3.8% as compared to 2017.

Repercussions of protectionism are expected to affect the global economy associated with the commodity chemicals market. Factors like the Sino-US trade dispute and the threat of external tariffs being imposed on cars imported from the EU are expected to stunt the growth. Additionally, Asian companies have been increasing global competition within this sector.

The commodity chemicals market research reports can be used to understand the strategies employed by the key players of this market. BASF, Bayer, and Henkel are some of the main players within the German Chemical sector.

France is one of the markets that played an integral role in the Industrial Revolution. The market has now evolved as one of the leading chemical markets within the European Union. France is hereby one of the countries that cater to advanced applied research fields. Rhône Poulenc, Pechiney, and Saint Gobain are three of the early chemical-based establishments within France. The presence of coal mines and hydroelectricity makes the French market a lucrative one. Additionally, the seaports served as an attractive location for the establishment of petrochemical-based commodities.

In the year 2014, the French market generated a revenue of approximately USD 110 Billion and direct employment worth 156,000 people. Bulk petrochemicals constitute the largest segment within this French commodity chemicals market. Air Liquide, Total Petrochemicals, Kem One are some of the key players within this market.

Asia Pacific Bulk Chemicals Market Analysis

The commodity chemicals market consists of both basic as well as industrial chemicals that are produced in bulk. APAC is the largest market globally with respect to the chemical sector. The region also acts as one of the biggest exporters of chemical-based products. The rapid growth of this section has led to several investments being made within this region. Additionally, several R&D based establishments have also emerged within this geographic spread. Companies like BASF and Shell have made huge research investments within this area.

The largest contributor to the GDP of APAC is the chemical industry. The market contributes roughly USD 5.7 Trillion to the global economy and growth dynamics. The industry currently supports 120 million jobs worldwide. The major growth factor for this sector is the availability of raw material and cheap labor within this market.

Other factors like government regulations also have an impact on the chemicals industry within APAC. Several countries situated throughout Asia have adopted environmental standards in accordance to REACH. Draft National Chemical Policy is the environmental legislation designed by India. The country aims on bringing several decisions based on emissions and safety with respect to in-plant scenarios under a single roof. Korea adopted K-REACH, which is the Registration & Evaluation of Chemical Substances Act. Therefore, public health, safety, and the environment are becoming an integral part of the growing chemical sector.

Additionally, amongst commodity chemicals, the Bulk petro-chemicals segments leads this market in terms of export as well as import facilities. The bulk availability of natural gas in GCC countries have been benefiting the commodity chemicals market within the APAC region. Governments of countries like India, China as well as Indonesia have been focusing on enhancing their existing manufacturing facility. According to a recent survey performed by C&EN, it was noted that 6 out of 8 Japanese firms reported a drop in earnings within this sector. One of the key factors that may act as a reason for this decline includes the softening of the petrochemical industry. Ethylene and polyethylene plants are being established in the U.S, therefore exports for these products have reduced considerably. Moreover, the profit margins for petrochemicals are slim in Asia because of which the industry is facing acute difficulty.

China leads the chemical industry within APAC. The country employs over 60 Million employees which are close to 50% of the total global employment generated within this market. In the year 2017, the country’s chemical sales contributed to 35.3% of the global chemical sales value.

Additionally, China is also one of the technology-based leaders in this market. The industries within this area have employed several concepts of process intensification to optimize space, equipment size as well as the yield generated. Technologies like Rotating packed columns are now being employed to aid mass transfer processes. This system is also known as a HiGee contractor.

Global companies such as Akzo Nobel, BASF SE, Arkema, and others have set up R&D centers in China to support the APAC Chemical Industry. BASF SE launched new process catalysis situated in Shanghai which is expected to curb the market trends in a positive direction.

BASF invested USD 10 Billion to build an integrated chemical complex within China. The establishment is situated in Guangdong Province in southern China. BASF has also launched a joint venture with Sinopec. This alliance has helped double the capacity of the steam cracking process carried out for the production of Ethylene. This partnership has hereafter increased the production capacity of plants situated within this region.

The commodity chemicals market forecast states that Sinopec experienced a 22% increment in terms of chemical sales margin. The sales value reached a worth of USD 70 Billion in the year 2018. The petrochemical firm is hereby expected to secure the second position globally in terms of ranking for chemical firms. This aggradation in terms of ranking is accelerated by Dow Dupont’s three-way spit. The company’s strategic partnership with BASF is expected to boost the sales associated with this segment. The joint venture, called BASF-YPC, opened a propionic acid plant earlier this year.

Additionally, companies like ExxonMobil chemicals have also established manufacturing units across China. The company plans on building a large scale ethylene cracker plant. Downstream polymer plants are also to be established by Exxon Mobil in Daya Bay, China.

Rest of the World Bulk chemicals Market Analysis