The covid-19 pandemic has had an unprecedented impact on the U.S. economy and the state of the chemical industry. Demand for the chemical industry has declined significantly in the past eight months. Although the industry has faced cyclical challenges such as overcapacity, price pressure and trade uncertainty before 2020, many changes after the pandemic show structural or destructive characteristics. American chemical manufacturer has responded to the crisis by focusing on operational efficiency, asset optimization and cost management.
In order to achieve success in R & D of chemical industry, the company should consider a series of strategies (such as key technologies) in the market. However, it means that companies may continue to focus too much on new business models and applications in the short term, which may eventually lead to too much attention to new growth.
A key aspect of dealing with this disruption in 2021 will be to understand which customer behavior is temporary and which is permanent, as recovery in different end markets and regions may be uneven. Companies can address this uncertainty by revisiting their product portfolio and conducting robust scenario planning with unknown factors. In this outlook for the chemical industry, we see five trends in the coming year.
Five trends of chemical industry market
Shift focus to new value streams and applications that drive industry recovery and future growth
Due to the diversity of end markets and more flexible sectors, the impact of the recession on the state of the chemical industry is likely to be moderate in 2021 compared with other industries such as automobiles. Therefore, in addition to cost optimization and capital constraints, industry participants may respond to changing demand by giving priority to growing end markets such as healthcare and electronics.
Policy recommendations related to regulation, trade and sustainability can have a significant impact
The new government has promised to reassess industrial tariffs because Trump’s campaign believes that tariffs are a less effective trade tool than other measures such as alliances and alliances. The new government also advocates an end to trade disputes with China. This could boost exports to the US chemical market and boost industry profitability through potential price recovery.
Fluctuations in raw material prices are unlikely to change the global export competitiveness of us chemical manufacturer
In a recent post election survey conducted by DDT, 58% of the chemical industry executives said they believed that at least the next three years, the cost advantage of the US chemical industry’s export competitiveness will continue to exist. However, due to factors such as imbalance of supply and demand or sustained sharp drop of oil price, the unexpected continuous rise of natural gas price may temporarily damage this advantage.
Under the background of people’s increasing concern for plastic waste, new opportunities have emerged
Consumers in the chemical market are likely to pay more and more attention to sustainability and give priority to products based on circularity and carbon footprint, which will drive chemical manufacturer to accelerate their decarbonization technology, re-examine their existing assets and start to diversify beyond hydrocarbons where possible. In 2021, many U.S. chemical manufacturers are expected to add mechanical recycling and renewable raw material polymers to their products and invest in advanced recycling to introduce game changing green technologies on a commercial scale.
Chemical manufacturers are increasingly using remote and digital sales channels
Unlike the recent, mainly cyclical, economic downturn, chemical manufacturers are experiencing significant changes in the way they operate and serve their customers. The company is adjusting how to work remotely, how to sell products, and how to interact with customers. Customers in the chemical industry want to simplify the ordering process, especially in a non-contact environment. Buyers expect better digital experiences and e-commerce solutions, such as real-time chat, which limits face-to-face interaction.
1 thought on “Chemical manufacturer entered a profound transformation period”