Editorial January-2020 Moving Forward in 2020
25 Jan 2020
As we move from one year to the next, as always there are headwinds and tailwinds, risks and opportunities, uncertainties and foreseeable trends. The fate of the chemical industry is tied to the end-markets demands, price volatility of key feedstock, trade and regulatory barriers and sustainability. Out of this one factor that is keeping businesses on their toes is trade war between the US and the China and the way it escalates in the near term. The recent issues between US and Iran is another factor which will decide the fate of the chemical industry in 2020. Here are some of the insights from one report from Deloitte published earlier in 2019.
- Chemical companies seeking new opportunities in end markets: Chemicals activity and industrial production are closely tied to the major end markets such as construction and automotive. The US housing markets shows signs of weakening growth. However, in India the construction of infrastructure is in full roll. As the electric vehicles (EV) markets is gaining more traction, there is a global slump on traditional automotive industry.
- Expansion of chemical production capacity is leading to oversupply and margin pressures: 2020 is expected to be challenging because of overcapacity due to commissioning of new capacity and lower plant utilization rates (less than 85 percent). 13 Spurred by low-cost shale gas availability in the United States, many petrochemical companies’ expansion projects along the US Gulf Coast have been completed in the latter half of 2018 and early 2019. In fact, 334 projects, amounting to $204 billion, have been announced, completed, or in works since 2010, which are directly linked to US shale gas
- Trade dispute slowing chemical demand growth: The ongoing trade dispute between the United States and China will likely continue to impose an element of unpredictability to chemical demand, thereby impacting investor sentiment and the overall growth outlook. Increased tariffs on Chinese chemical imports into the United States have the potential to negate the low-cost advantage enjoyed by US chemical producers.
- Consumer activism and environmental regulations are further directing chemical companies towards sustainability:
As we step into the next decade, the adoption of sustainable practices is expected to gather pace. There is an existing $120 billion market opportunity in the United States and Canada alone for plastics and petrochemicals that could be developed by recovering waste plastics. Chemical companies will likely be at the forefront of such sustainable practices by developing processes such as closed-loop recycling, in which polymers can be chemically reduced to their original monomer forms so that they could be processed or re-polymerized and remade into new plastic materials.
With all this up for 2020, here at Chemical Market, we have launched our new LEADS platform where you can post your raw materials and get leads based on locations. Users and companies can search for raw materials or your products in several markets that you manufacture, distribute or trade based on location. Hope within the next 2 months we will bring an exciting iOS and Android app for our users to deal with instant leads receiving and responding through your device.
Chemical Equipment and machinery companies can advertise with us online and in print in the articles and home page sections.
Also please check the March calendar of events as there are several interesting and exciting events this year that you don’t want to miss.
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