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    Home > Chemial News > Echemi Focus > Where will the global chemical market go in 2021?

    Where will the global chemical market go in 2021?

    Echemi 2021-01-13

    Recently, a number of institutions have conducted a thematic outlook on the global chemical demand in 2021 after the COVID-19 pneumonia epidemic, and discussed some key issues in the chemical industry in 2021 and beyond. In general, although the epidemic is still severe in some areas in winter, the chemical market is recovering and will continue to improve, driven by good news such as successive vaccinations in various countries.

     

     

    Economic recovery provides impetus

     

    IHS Markit (IHS Markit) predicted last month that the global GDP growth rate will reach 4.5% in 2021, which will provide a driving force for the recovery of chemical demand. Sarah Johnson, Executive Director of Eschen Huamai Global Economy, said: “Affected by the new crown pneumonia epidemic, the market will experience a slow start and a strong end in 2021.” It is expected that the real global GDP will fall by 4.0% in 2020 to 74. The biggest drop in a year.

     

     

    Johnson said that due to the different timing of economic recovery in various regions, there will be some differences in the overall recovery. China began to recover in the second quarter of 2020, but Japan and several major European economies are not expected to return to the level before the epidemic spread until 2023 or 2024. Western Europe has been particularly hard hit by the new crown epidemic and will slowly recover. The Asia-Pacific region has the earliest economic recovery driven by China, and will account for more than half of global economic growth in the next 10 years.

     

     

    Chemical production resumes growth

     

    The American Chemical Industry Council (ACC) estimates that global chemical production is expected to rebound by 3.9% in 2021 after experiencing the largest drop of 2.6% in 40 years in 2020. ACC estimates that the new crown pneumonia epidemic has caused a decline of 7.8% in global chemical production from peak to trough. The period lasted from December 2019 to June 2020, but as of mid-November, almost all countries and regions are recovering.

     

     

    According to ACC, the performance of each region is different. Latin America's chemical production fell by 7.2%, North America's production fell by 3.9%, Europe fell by 2.2%, and the Asia-Pacific region fell by 2.1% overall. In 2021, chemical production in all regions will resume rising, with China leading the strongest prospects for chemical production growth in Asia. China’s chemical production in 2021 is expected to grow by 5.4%, the Asia-Pacific region as a whole will grow by 4.4%, North America by 4.1%, Latin America by 4.6%, and the European chemical industry will also grow by 3.1%.

     

     

    ACC stated that after 2021, global chemical production will continue to grow. It is estimated that global chemical production will grow by 2.6% and 2.3% in 2022 and 2023, respectively. By 2030, global chemical production will grow at an average annual rate of 2.1%. The developing countries in Asia-Pacific, Africa and the Middle East will have the strongest growth, North America will also see strong growth in chemical production, and Latin America will also resume growth.

     

     

    The industry is also cautiously optimistic about the growth of chemical production. Craig Rogerson, Chairman and CEO of Hexion, said: "I am optimistic about 2021, but there are still many uncertainties."

     

     

    Bright prospects for the U.S. chemical industry

     

    Martha Moore, senior director of ACC Policy Analysis and Economics Department, said that although the US chemical market has fallen sharply, US demand is gradually recovering. She said: "The long-term prospects of the US chemical industry remain optimistic because the United States has energy advantages. Once the epidemic crisis is resolved, the US chemical industry will gain momentum, and the living and industrial markets will also recover." ACC predicts that the fastest growth will be Basic chemicals, followed by consumer products and specialty chemicals.

     

     

    The latest Chemical Activity Barometer (CAB) released by ACC shows that in November, the US CAB Composite Index increased for the seventh consecutive month. Entering 2021 CAB data will be consistent with the continued economic recovery. ACC predicts that US economic growth will rebound by 3.7% in 2021, which will be mainly driven by consumer spending growth, industrial production will grow by 3.7%, and almost all industries will see growth, including automobiles, aerospace, home appliances, steel, oil refining, plastics and The rubber products and other industries rose sharply. Moore said: "The outlook for the post-epidemic period will be based on solid fundamental support, and chemical demand will increase across the board. Customer demand continues to grow, the export market remains stable, and its competitive advantage with domestic shale gas and natural gas liquid (NGL) supply in the United States. All are factors that continue to rise in the US chemical industry."

      

    In 2020, the demand for basic chemicals in the United States fell by 1.3%. Driven by the continued growth of plastic resins, plastic resins in the United States still maintained a positive growth rate of 0.9%. In 2021, the US basic chemicals will show a rebound trend, which is expected to grow by 5.0%, and plastic resins will grow by 6.9%. U.S. production of specialty products fell by 10.8% in 2020, mainly due to the negative impact of shutdowns in the oilfield chemicals, rubber processing, foundry chemicals and ink industries. With the recovery in demand for rubber processing, antioxidants, plastic compounds, catalysts, plastic additives, and lubricant additives, it is expected that the output of US specialty chemicals will increase by 2.4% in 2021.

     

     

    Because the United States has unique advantages in obtaining energy and raw materials, the United States will remain the preferred destination for chemical investment. ACC estimates that between 2010 and 2019, U.S. base olefin production capacity has increased by nearly 40%. In the next 10 years, U.S. basic olefin production capacity will increase by another 20%. As of the end of November 2020, about 345 new chemical production projects have been announced, with a total investment of more than US$207 billion. Although the growth rate of capital expenditure will slow down from the boom period of the 2010s, ACC still predicts that the average annual growth rate of capital expenditure of the US chemical industry will still exceed 4% from 2021 to 2025.

     

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