by Commodity chemicals are basic building block chemicals that serve as inputs and raw materials for various other derivative chemicals and products. Some examples include ethylene, propylene, benzene, methanol, and others. These chemicals find widespread applications across many industries such as automotive, packaging, construction, healthcare, and more. For instance, ethylene is used to produce ethylene glycol which is used to manufacture polyester fibers, plastic bottles, antifreeze, etc. Similarly, propylene is utilized in production of polypropylene plastics which have applications in packaging films, textiles, automotive parts, and consumer goods.
The global commodity chemicals Market is estimated to be valued at US$ 67.72 billion 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 Dynamics:
Growing demand from various end-use industries is expected to flourish the commodity chemicals market over the forecast period. Rapid industrialization and urbanization in developing regions are increasing consumption of derivative goods and products that utilize commodity chemicals as building blocks. For instance, growth in the packaging industry driven by increasing focus on food packaging and consumer goods is propelling demand for plastics and fibers, thereby fueling consumption of raw materials like ethylene, propylene, and methanol. Further, rebound in the automotive industry from supply chain disruptions brought on by the pandemic is augmenting propylene/polypropylene and methanol requirement in the sector.
Another major driver for the market growth is expansion of petrochemical facilities worldwide. Key market players are actively investing in capacity additions to leverage emerging market opportunities. For instance, BASF SE started commercial operations of its new Verbund site in Zhanjiang, China in 2021 to support growing energy and chemical demand. Such initiatives are expected to ensure adequate supply and meet the rising demand for commodity chemicals from developing regions over the forecast period.
Segment Analysis
The commodity chemicals market is primarily segmented into organic and inorganic chemicals. The organic chemicals segment dominated the market in 2024, accounting for nearly 65% of the total share. This is majorly attributed to the wide application scope of organic chemicals across various end-use industries such as pharmaceuticals, plastics, food and beverages. Within organic chemicals, basic chemicals and petrochemicals collectively contributed to over 50% of total organic chemicals demand in 2024.
PEST Analysis
- Political: The regulations imposed on emission standards and environmental protection are influencing investment decisions in the commodity chemicals industry. Many countries have stringent regulations to reduce greenhouse gas emissions.
- Economic: The global economy growth impacts the demand for commodity chemicals from end-use industries such as construction and automotive. Growing per capita GDP in developing nations is contributing to the consumption of commodity chemicals.
- Social: Increasing health awareness is driving the demand for safe and sustainable chemicals. Social media has raised concerns around toxic chemical exposure.
- Technological: Technologies supporting cost efficiency and minimizing environmental footprint are being adopted. Investments in digitalization and automation allow manufacturers to enhance production efficiency.
Key Takeaways
The global commodity chemicals market is expected to witness high growth in the forecast period of 2023 to 2030.
Regional analysis: Asia Pacific is projected to retain its leading position through 2030 on account of rapid industrialization and urbanization. China dominates Asia Pacific’s demand, accounting for more than 30% share due to its massive manufacturing base for automotive, packaging, and construction industries. North America and Europe collectively held over 40% share in 2024. However, Asia Pacific is anticipated to surpass these developed regions during the forecast period.
Key players operating in the commodity chemicals market are BASF SE, Dow Inc., SABIC, and LyondellBasell Industries. BASF SE is one of the leading suppliers globally, providing commodity chemicals including methanol, ethylene, propylene, benzene, xylene, and styrene. Dow Inc. offers a diversified portfolio of commodity chemicals and plastics.
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