The global specialty chemicals market size was estimated at USD 1.16 trillion in 2016 and is projected to grow at a CAGR of 5.6% from 2017 to 2025. High demand for function-specific chemicals owing to transitioning consumer & industrial product life cycles has fostered industry growth in recent years.
Growing concerns regarding pollution and environmental degradation have generated high demand for alternative applications that contribute to lower greenhouse gas (GHG) emissions, such as water-based paints, biodegradable plastics, solar-powered and rechargeable electronics. Technological innovations are expected to present additional lucrative growth avenues.
U.S. specialty chemicals market revenue by product, 2014 - 2025 (USD Million)
Despite being a mature industry, manufacturers may still tap opportunities that arise from macroeconomic cycles, such as an increase in housing starts and industrial manufacturing. Rising competition levels from SMEs in emerging economies across Asia Pacific & South America is also expected to prompt innovation and developments in manufacturing, which is conducive to overall industry growth.
Industry dynamics are gradually shifting towards the Middle East owing to its vast petrochemical reserves, which form the crucial feedstock for downstream derivatives; Asia Pacific is another fast-growing region that has competitive leverage owing to inexpensive labor & taskforce, trade liberalization policies and progression of major end-use industries in recently industrialized economies.
The rapid expansion of shale oil & gas drilling & refining activities, along with favorable oil & gas prices is also anticipated to boost market growth over the forecast period. Rising oil exploration activities in the U.S. has also contributed considerably to oilfield chemicals, and other lubricants demand in the region.
Key manufacturers are investing heavily in capacity expansion as well as modernization of existing facilities to gain traction and compete with existing multinationals in the region. This factor is expected to influence market growth positively over the forecast period.
Construction chemicals are projected to emerge as fast-growing products owing to the considerably high demand for specialized waterproofing compounds, tile fixing adhesives, joint fillers, repair and renovation compounds among others. The recovery of the U.S. housing market and an increase in infrastructural construction activities across India, China, Thailand and other emerging economies has also contributed to segment growth in recent years.
Coatings, adhesives, sealants and elastomers (CASE) is expected to remain a lucrative segment owing to numerous innovations that have enhanced the performance characteristics of these materials. Major companies such as Henkel, Bostik, and 3M have also introduced new polymeric CASE products that are expected to revolutionize the sector.
The advent of miniaturized, rechargeable and sustainable electronics has driven significant demand for compounds that foster enhanced performance and reduce maintenance issues. Additionally, sophisticated compounds assist in the production of several components such as silicon wafers, printed circuit boards (PCBs), and other optoelectronics such as flat panel displays.
Agrochemicals are expected to expand at a rapid pace in emerging economies owing to the high dependence of these countries on agriculture and food cultivation to meet rising consumer demand. Rapid automation and industrialization have also contributed to the fast growth of the agricultural sector, which in turn has driven the demand for lubricants, maintenance fluids, and other specialty products.
Automotive is expected to remain a fast-growing application with high demand for paints, coatings, lubricants, adhesives and others to reduce weight and foster cost savings. Specialty compounds currently account for about 20% of overall content in vehicles and are likely to increase as OEMs attempt to meet emission & sustainability guidelines and regulations.
Global specialty chemicals market volume by application, 2016 (%)
The construction sector is also generating high chemicals demand, to impart additional protection in buildings, reduce consumption of water and cement while erecting projects, and boost overall building lifespan. Renovation of old buildings in developed economies and upcoming high-rise projects in emerging economies are expected to generate high demand over the near future.
Housing & residential construction is expected to emerge as a fast-growing segment owing to sustainable community development coupled with favorable policies towards modernizing existing infrastructure in developing countries. Furthermore, contractors are attempting to accommodate rapidly expanding population by creating more residential blocks, which is a crucial factor for industry growth.
Industrial manufacturing is anticipated to remain a significant application owing to increasing reliance on domestic production in an attempt to lower the dependence on imports in several economies. North America has also witnessed a rebound in industrial activities post the shale gas boom, while Asia Pacific is expanding its existing production capacities with investments from foreign players, which is conducive to industry expansion.
Asia Pacific is anticipated to remain the fastest growing market as the number of players in this region has risen significantly in recent years, while the region itself has the advantage of low raw material & labor costs. Countries such as India, Thailand, Malaysia, and Singapore are expected to generate high demand as their economies grow & diversify, creating significant potential for investors seeking untapped opportunities in these markets.
Demand in Central & South America (CSA) is anticipated to grow as well, as the construction, automotive & electronics sectors pick up the pace in countries such as Peru, Colombia, and Chile. The governments in these and other CSA countries are actively encouraging regional production levels in an attempt to strengthen the economy, which has boosted the availability of subsidies for local manufacturers.
The Middle East is another significant investment zone owing to the vast availability of crude oil reserves & chemical feedstock, along with a rapidly growing construction market in Saudi Arabia, UAE, Qatar and Oman among others. The automotive, electronics and consumer goods sectors are also growing in these countries as a result of high disposable income the advent of advanced digitalization.
Companies catering to this industry are subject to economic cycles and swings in the end-use markets, compelling them to continuously monitor railcar loadings, industrial output, automotive production levels and housing starts among other indicators to gauge their performance & formulate expansion strategies.
Most manufacturers are sensitive to raw material costs, energy & commodity prices, which creates challenges while realizing profit margins, owing to the nature of volatility in these materials. Companies are often prepped to react in case of inventory buildup and signs of a broader turndown, by restructuring, portfolio consolidation, temporary plant shutdowns and other strategies.
Key players currently involved in production include BASF SE, Evonik Industries, Henkel AG & Co., Solvay SA, PPG Industries, Albemarle Corporation, AkzoNobel, H.B. Fuller, Ashland Inc., Dymax Corporation, Ferro Corporation, Huntsman Corporation, Chemtura Corporation, The Dow Chemical Company, ExxonMobil, Avery Dennison, Beardow & Adams, and Uniseal Inc. among others.
Base year for estimation
Actual estimates/Historical data
2014 & 2015
2017 - 2025
Volume in Kilo Tons, Revenue in USD Million & CAGR from 2017 to 2025
North America, Europe, Asia Pacific, Central & South America, and Middle East & Africa
U.S., Canada, Mexico, UK, Germany, France, Italy, Japan, China, India, Brazil, Saudi Arabia
Revenue forecast, competitive landscape, growth factors and trends
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Segments covered in the report
This report forecasts revenue growth and provides an analysis on the latest trends in each of the sub-segments from 2014 to 2025. For the purpose of this report, Grand View Research has segmented the global specialty chemicals market on the basis of product, application and region:
Product Outlook (Volume, Kilo Tons; Revenue, USD Million, 2014 - 2025)
Specialty Polymers & Resins
Application Outlook (Volume, Kilo Tons; Revenue, USD Million, 2014 - 2025)
Regional Outlook (Volume, Kilo Tons; Revenue, USD Million, 2014 - 2025)
Central & South America
Middle East and Africa
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