Chemical industry has recovered significantly from the pandemic induced crisis in 2021, but 2022 is anticipated to surpass the pre-pandemic sales levels. The rebound demand in chemical intensive end user markets is stimulating profit generation globally.
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Supply chain bottlenecks are dissolving, and so are disruptions in manufacturing. It is evident that barring further supply disruptions markets are expected to function seamlessly.
In this circumstance, it is crucial to understand the future from several perspectives.
End-User Market Situation
2021 took a dip in automobile industry sales as an aftermath of the 2021 recession. This year is projected to recover from those losses and accrue 16.0 million in sales as per American Chemistry Council (ACC).
Also, housing starts are expected to dip in 2022 owing to disruptions and issues in material sourcing with a growth projection between 2022-23 to be around 1.56 million.
Trade Situation
Trading across the globe plummeted heavily by COVID-19 pandemic. 2022 presents the opportunity to start afresh. The US already experienced a positive growth in 2021 with a surplus of 24 billion, states ACC.
Market projections estimate a growth of 7.3% in exports and 7.1% in imports in the US, resulting in a surplus of $26 billion.
Industrial Aspect
Severe contractions in production were experienced by the Chemical industry in FH-2021 owing to supply disruptions, end-user demand reduction, and operational halt across several industries.
The advent of 2022 has strengthened both end-user markets and exports resulting in high prospects for this industry in the coming months. For instance, ACC projects over 2% production growth between 2023-25 for the US.
Global Scenario
The supply chain disruptions in 2021 have inadvertently created opportunities for growth in 2022. The production volume mediated in 2021 is expected to be manufactured now and add to revenue generation this year.
The North America market has substantial growth prospects entering 2022, owing to feedstock-advantage and rebound demand for goods.The Asia Pacific region has the most promising prospects with its progressively significant and dynamic economies.
The chemical industry in Africa and the Middle East, also gains advantage of abundant feedstock, and should continue growing along with Eastern Europe and the former Soviet Union. Chemical industry will continue to recover in Latin America and Western Europe, though at a slower pace in the near future.
Sustainability
‘Green Deal’ is substantially gaining steam in several industries. Consumers and industries are making the switch to a green alternative. In this situation, several prominent players of the chemical industry have agreed to consumer and internal goals for carbon emission reduction.
A survey by Deloitte discovered that 90% respondents from the chemical industry were willing to focus on improving energy and resource efficiency in the production process.
To Conclude..
Chemical industry is poised to become economically and environmentally profitable in the near future. The prominent players need to be more vigilant of the potential prospects to ensure resilience in such a highly competitive market and rebound from the recession.