The global chemical industry has seen dramatic changes over the past two years. For a sector that is generally fairly stable, the changes experienced are unusual. This represents a restructuring of the industry at a geographical level and a consequent change in trade patterns.
Ti Insight forecasts that the global chemical logistics market will reach €454,637.7m in 2024, growing by 2.8% over the year. Forecasting out to 2028, the global chemical logistics market is expected to reach €513,188.5m, growing at a 5-year CAGR of 7.2% between 2023 and 2028.
The expansion in Southeast Asia has notable implications for logistics services. The major economies in the region have embarked on heavy investment in new chemical production infrastructure. The objective is to support domestic demand for chemicals, which is generally growing strongly. However, most have an ambition to export production to global markets if they can.
In China, by far the world largest market for chemicals, production has continued to increase. Western investment is still substantial with BASF for example, opening two very large integrated sites through 2023-2024, one in Nanjing and another in progress in Zhanjiang. By 2023, China was accounting for 44% of global chemical sales, up from 31% in 2022, with a market size of €17,8392.3m. The 2024 market size is forecast to be €19,1325.7m and it is growing at a 5-year CAGR of 5.5%, the highest in the world. The total Asia Pacific CAGR for the same period is 4.3%.
In contrast, there has been a crisis in Europe, mainly due to the impact of the increase in gas prices and Germany is central to this – the country’s chemical production has been heavily dependent on gas exported from Russia, unlike chemical producers in Norway or the UK. These trends are reflected in the numbers, with a market size of €80,476.6m in 2021 dropping off to €72,849.8m in 2023. A slight increase year-on-year is expected after this, as the chemical industry gets back on its feet, with a 5-year CAGR of 1.1% from 2024-2028.
The North American chemical sector grew moderately in 2023 to €73,181m, with year-on-year growth of 0.5% in 2024. This is largely being driven by domestic growth in the US, which has been fairly robust, however the impact of exports has been limited so far.
The chemical industries of Saudi Arabia, the UAE and the smaller Emirates are now of global significance, with access to very cheap energy and gas. They have also built some very large logistics facilities that are of global significance. A little like North America, Middle Eastern chemical production would seem to have considerable potential, which is not yet being fully realised yet. Ti Insight forecasts that the Middle East and North Africa market will reach €16,576m in 2024 growing at a 5-year CAGR of 2.3% between 2023 and 2028.
Authors: Julia Swales, Thomas Cullen
Source: Ti Insight
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