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Specialty chemicals are produced by a complex, interlinked
industry. In the strictest sense, specialty chemicals are products
sold on the basis of their performance or function rather than
their composition. They can be single-chemical entities or
formulations whose composition sharply influences the performance
and processing of the customer's product. This report covers 28
specialty chemical segments that are categorized either as
market-oriented products (used by a specific industry or market,
such as electronic chemicals or oil field chemicals) or functional
products (groups of products that serve the same function, such as
adhesives, antioxidants, or biocides). There is considerable
overlap in this method of characterization. Market-oriented groups
often include numerous functional chemicals used by the same
market, while functional chemicals typically are used by several
different markets. This distinction is made for convenience in
discussing strategic aspects of the business segments rather than
because of a real difference in the products.
In 2020, the market value of the 28 specialty chemicals segments
covered in this report totaled $602 billion. Because of the
overlapping nature of the individual specialty chemical segments,
the total market size is on average 8-10% lower than the sum of all
the individual markets. In 2020, the degree of double-counting was
9%, or approximately $56 billion in terms of market value.
Therefore, the adjusted global market value for specialty chemicals
in 2020 was closer to $546 billion.
Mainland China was the largest consumer of specialty chemicals,
accounting for 26% of the 2020 global market at $156 billion. North
America (the United States, Canada, and Mexico) was second (22% of
global sales), followed by Other Asia outside Japan and mainland
China (16%), Western Europe (15%), and Japan (7%). The remainder
was sales in Central and South America, Central and Eastern Europe,
the Middle East, and Africa.
The largest specialty chemical segments in 2020 were specialty
polymers, electronic chemicals, industrial and institutional
cleaners, surfactants, and flavors and fragrances. These accounted
for 37% of the industry's global sales. An estimated 65% of world
consumption of specialty chemicals went into five end-use
industries—soap, cleaning, and cosmetics; food and beverages;
electrical and electronics; construction; and motor vehicles. Other
important end-use industries for specialty chemicals include paper
and pulp, plastic products, oil and gas mining, and printing and
publishing.
The COVID-19 pandemic led to a 2.5% decline in the global market
value of the industry from 2019 to 2020. For this study, growth is
projected to return in 2021, with market value increasing 5% from
the 2020 level. During the 2021-26 period, the industry is
projected to grow at a compounded annual rate of 3.5%, reaching
almost $750 billion by 2026. Mainland China will continue to be the
largest consuming area for specialty chemicals throughout the
forecast period, where consumption is expected to grow at 5.8% per
year.
Posted 27 August 2021 by Aida Jebens, Associate Director, Specialty Chemicals Insights, S&P Global Commodity Insights
