China asserts dominance in specialty chemicals demand

The report estimates that in the next five years, the global specialty chemicals market will grow by 3 per cent annually.

Driven by growing global demand for personal electronics and the increasing buying power of Chinese consumers, the global market for specialty chemicals is pegged at US$556 billion in 2016, according to new analysis from IHS Markit. The report estimates that in the next five years, the global specialty chemicals market will grow by 3 per cent annually.

Of the global market, electronic chemicals, industrial and institutional cleaners and specialty polymers, each accounted for 7 percent to 8 percent of the total, with a market value of $40 billion to $45 billion in 2016, IHS Markit said. Surfactants, construction chemicals, flavours and fragrances, catalysts, specialty coatings, and water-soluble polymers accounted for roughly $30 billion each in market value. The food-additives market was about $25 billion.

Specialty chemicals consumption in North America, Western Europe and Japan will increase slower than the world average. In comparison, China's market will grow the fastest. Its economy is still accelerating at a steady pace of 5 percent to 6 percent, although not at the phenomenal rate it was a few years ago. IHS Markit report expects China’s share of the specialty chemicals market to surpass that of North America by 2021.

“The specialty chemicals market is very closely tied to economic growth, so the market was sluggish last year and declined slightly (minus 0.2 percent) compared to 2015," said Aida Jebens, Associate Director of Specialty Chemicals at IHS Markit, and the report’s lead author. “Since then, the market has been impacted by the economic slowdown in China, the recession in several South American countries, the weakness in the oil and gas industries, and the spotty performance of construction markets.”