2022-09-07
The global basic chemicals market was valued at $649.8 billion in 2020, and is projected to reach $949.1 billion by 2030, growing at a CAGR of 3.9% from 2021 to 2030.
Around 60% of the manufacturing industries were hardly hit by the pandemic while other industries such as food & beverages and pharmaceuticals are moderately affected due to high demand. This has led the basic chemicals market to witness a downfall in demand, attributed to its use in various manufacturing & other end-use sectors.
Basic chemicals are usually produced in large quantities and these chemicals are crucial products that will be used in the industrial and consumer sectors. Inorganic chemicals are chemical compounds that lack carbon-hydrogen bond while organic chemicals are chemical compounds that contain carbon-hydrogen bond. Acetic acid, ethanol, phenol, urea, benzene, ethylene, and methanol are some examples of organic chemicals that are used in applications such as vinegar production, pharmaceuticals, paints & adhesives, and descalers. Inorganic chemicals are used in applications such as pigmentation, semiconductor, fuel, medicine, and chemical industry.
The increase in demand for a wide range of consumer goods has surged the growth of the chemical industries in both developed and developing economies where basic chemicals are used either as raw material or intermediate in manufacturing different products. This may act as one of the key drivers responsible for the growth of the basic chemicals market in the chemical industries. Furthermore, the increase in foreign direct investment (FDI) inflow in chemical industries boost the growth of the chemical manufacturing sectors where a wide range of basic chemicals are used for product manufacturing purposes. For instance, according to a report published by India Brands Equity Foundation, the FDI inflows in the chemical sector reached $18.69 billion from April 2020 and June 2021. All these factors collectively surge demand for basic chemicals, thereby augmenting the global basic chemicals industry growth.
However, exposure to chemicals can cause acute or long-term detrimental health hazards. There are different types of chemicals such as sulfuric acid, phosphoric acid, nitric acid, and others that may be hazardous if exposed beyond the permissible exposure limit. For example, as per the standard industrial guidelines issued by the Occupational Safety and Health Administration (OSHA), the legal airborne exposure limit for sulfuric acid is 1mg/m3 for an 8-hour work shift. Prolonged exposure to sulfuric acid may harm the eyes, skin, teeth, and lungs. Also, highly concentrated acids must be handled carefully otherwise they may cause serious skin problems. These factors together restrain the growth of the basic chemicals market.
On the contrary, presence of major chemical manufacturing companies such as BASF SE, Bayer AG, Boehringer Ingelheim GmbH, and Evonik Industries AG in Germany is anticipated to drive the demand of the basic chemicals market. Factors such as investments and favorable frameworks are anticipated to escalate the production and sales of basic chemicals in Europe. In addition, according to report by Germany Trade & Invest (GTAI), efficient cost structure and presence of highly skilled labors has pushed the demand for adhesives & sealants manufacturers. Leading automotive expertise has created new opportunities for key-players entering into the market. Basic chemicals are being widely used in production of adhesives & sealants. This is further anticipated to offer new opportunities in the global market.
The basic chemicals market is segmented on the basis of type, end-use, and region. On the basis of type, the market is categorized into organic and inorganic. By end use, the market is divided into chemical industry, food & beverages, textile, pharmaceuticals, pulp & paper, polymer, and others. Region wise, the market is studied across North America, Europe, Asia-Pacific, and LAMEA.
Basic chemicals market, by region
The Asia-Pacific basic chemicals market accounted for 49.4% of the market share in 2020, and is projected to grow at the highest CAGR of 4.5% during the forecast period. Chemical industry sector in China is growing and remains to outpace as compared to other major chemical producing countries. Factors such as rise in investments, intense competition, and presence of large number chemical manufacturing companies is anticipated to drive the demand of basic chemicals market in Asia-Pacific. Coupled with shift towards specialty-chemical manufacturing sector, growing consumer-demand, and mounting superiority of China's industrial output is another considerable factor driving the demand of basic chemicals sector in Asia-Pacific.
Asia-Pacific would exhibit highest CAGR of 4.5% during 2021-2028.
Basic chemicals market, by product type
In 2020, the organic product type was the largest revenue generator, and is anticipated to grow at a CAGR of 3.2% during the forecast period. Phenol is a another important and widely used organic chemical compound in pharmaceutical sector. It is used to treat muscle spasticity by injecting phenol into muscles and it is widely used during ingrown toenail surgery is another considerable growth factor in the global market. Vaccines are utmost important in healthcare sector. However, proper storage of these vaccines is important in order to enhance the effectiveness of these vaccines. Bacteria tend to develop in these vaccines if not properly preserved and further leads to vaccine contamination. Thus, to overcome this problem, phenol is used as vaccine preservatives as it helps to prohibit the growth of bacteria and microbial contamination.
Basic chemicals market, by end use
By end-use, the chemical industry segment dominated the global market in 2020, and is anticipated to grow at a CAGR of 3.4% during forecast period. The increasing demand for a wide range of consumer goods has surged the growth of the chemical industries in both developed and developing economies where basic chemicals are used either as raw material or intermediate in manufacturing different products. This may act as one of the key drivers responsible for the growth of the basic chemicals market in the chemical industries.
