The chemicals industry is always in flux. The past several years have seen many positive developments among niche chemicals markets, although the global chemicals industry has remained relatively flat. A number of recent events including Brexit and policy changes implemented by the new U.S. administration could cause drastic upheaval among the world’s markets in 2018.
At Noah Technologies, we take it upon ourselves to know what’s happening in our industry. The chemicals market is always shifting, but understanding the landscape helps us – and our clients – reap the benefits. Here’s a look at how the chemicals industry will change in 2018 and beyond.
Growth in Specialization
Specialty subsectors of the chemicals industry are growing faster than the overall market. As manufacturers and industrial players increasingly look to R&D to further their own goals, they’re turning to specialty chemical suppliers with deep knowledge of the limitations and opportunities of specific compounds. Additionally, as global brands face intense scrutiny to better report and regulate the chemical components they utilize, many have found that working directly with a quality-focused supplier may relieve logistical burdens on the backend.
Shift in Petroleum Volatility
Petroleum and its production has long ruled the foundation of the chemicals sector. While petrochemicals, and particularly the naptha-ethane spread, will continue to have significant impact on the availability of feedstock and other raw materials, market swings will decrease in severity. A focus on sustainability at the industrial level will draw attention to alternatives (such as biofuels) while reducing the industry’s overall reliance on traditional fossil fuels and fossil fuel-driven products.
Demand from Overseas
The American economy should maintain its solid performance in 2018, but the demand for chemicals from overseas buyers will almost certainly increase. The unparalleled and still-unbridled growth of China, for example, means the nation cannot increase capacity enough to meet demand, forcing the country to import previously domestically-produced chemicals. Even if the American chemicals market cools slightly, there should be enough global demand to keep trajectory moving in an upward direction.
Driven by Consumer Behavior
Consumer behavior has always predicted the chemicals industry. After all, chemicals are the basis of the products we use every day. As trends in consumer purchasing shifts, so too does the need for specific chemical products. Mass-produced electronics are particularly exciting to watch as they make up a significant and fast-growing portion of the consumer goods market and require myriad specialty chemicals to produce.
Noah Technologies is a chemical supplier putting quality at the forefront. Everything we do, from rigorous in-house testing to custom-producing specialty chemicals, is with purpose. In this chemicals market, it’s not enough anymore to compete simply on inventory or price.