Recently, Mike Mulveda, executive director of specialty chemicals at S&P Global Commodity Insights, released a report saying that despite many ups and downs, the specialty chemicals market will continue to grow , with a large number of innovative technologies and specialty chemicals that will help drive the energy transition. Products and sustainable solutions will support the growth of the specialty chemicals market.
Malveda said that from a macroeconomic point of view, the high inflation that started in 2022 is continuing, reducing the purchasing power of global consumers and depressing demand. However, the market for specialty chemicals is expected to maintain growth this year as rigid demand remains strong and prices rise.
In terms of cost , the cost structure of specialty chemical producers in 2023 is changing due to rising inflation and energy prices, as well as rising labor costs and rising raw material prices. Specialty chemicals companies try to pass these higher costs on to customers. In addition, energy security risks and geopolitical challenges remain in 2023, but natural gas prices have eased, which relieves some cost pressures for companies.
On the demand side , Malveda said that by 2027, the world’s consumption of specialty chemicals will expand , while mainland China and other Asian countries will have relatively high growth rates. In particular, the Chinese government is strongly supporting the construction of semiconductor manufacturing facilities that consume large quantities of electronic chemicals. Meanwhile, other Asian markets such as South Korea will continue to produce and export electronics. Market growth in North America, Western Europe and Japan was limited.
In terms of various industries , Malveda said that the automotive industry, as one of the main drivers of the specialty chemicals market, will grow moderately. It is expected that by 2025, world auto production will return to pre-pandemic levels. Electric vehicles will contribute to growth as they create new opportunities for specialty chemicals such as specialty polymers, battery materials, and under-the-hood component products. The construction industry , another major consumer of specialty chemicals, is expected to see global growth slow to about 2% this year, with modest growth ahead.
Malveda predicts that by 2027, electronic chemicals will remain the largest and fastest-growing market among specialty chemicals. Electronic chemicals are widely used in the production of printed circuit boards, the backbone of the electronics, mobile and computer industries and essential components for internet connectivity, 5G or the Internet of Things.
In addition, segments such as specialty polymers, nutraceuticals, cosmetics, flavors and fragrances, surfactants, plastic additives, and specialty coatings are all expected to experience above-average growth rates through 2027. The market demand for biodegradable polymers will also increase rapidly.