Atradius Predicts Global Chemical Industry Growth Will Continue to Slow Over the Next Two Years, With Significant Differences Among Countries

The main viewpoint of this article is adopted from the American commercial insurance giant.AtradiusThe trend forecast for the global chemical industry over the next two years.

The so-called "other mountains' stones can be used to polish jade" means that while one may not agree, it can serve as a reference.

For those who need the complete report, please go to the end of the article, where I will provide the link for you to download it yourself.

Global Overview of the Chemical Industry

The current global economic weakness and the trade policies between countries are exerting tremendous direct and indirect dual pressure on the chemical industry.

AtradiusAnalysis and Prediction2025The global chemical output value growth will slow down to.2.1%，2026The year will continue to slow down to1.5%。

The chemical industry can be said to be deeply integrated into almost all industrial production sectors, which also means it is more easily affected by tariffs and trade policies.

The chemical industry has a particularly long supply chain from top to bottom. An increase in upstream raw material prices will affect the production costs of chemical products, while the rise in input costs for downstream industries will suppress the demand for chemical products.

No matter from which position in the industrial chain, the chemical industry will feel tremendous pressure directly or indirectly.

Whether it is the automotive new energy, semiconductor chips, medical pharmaceuticals, or aerospace, the main targets of U.S. tariffs will also have an impact on the chemical industry.

The current characteristics of the global chemical industry are intense competition and deep market integration.

Industry giants, due to their scale and cost advantages, can invest more resources in research and development, innovation, and marketing, which naturally gives them more opportunities for future development.

Small companies in niche industries lack both scale advantages and the possibility to invest more in future opportunities, making it difficult for them to maintain competitiveness within the industry.

The United States, a key area in the downstream of the chemical industry, is deeply affected by tariffs.

2024The output value of the American chemical industry increased that year.3.3%，AtradiusThe analysis predicts that growth will slow down this year.0.6%， 2026The year will shrink.0.8%。

The key downstream industries of chemical products are severely affected by tariffs and ongoing trade policy uncertainties, leading to a significant increase in input costs.

The continuous decline in demand, particularly in the automotive and construction industries, has significantly impacted the chemical industry.

The constantly changing tariff policies have also prompted various American companies to postpone projects or delay investments, as they are waiting for full clarity on the policies.

In the medium term, the outlook for the U.S. chemical industry is relatively optimistic, driven by stronger consumer demand and cost advantages brought about by the shale gas revolution.

2026The expected expansionary fiscal policy of the Trump administration this year may continue to boost consumer spending and corporate investment, potentially stimulating demand for manufactured goods and chemicals.

AtradiusAnalysis and Prediction2027The output value of the American chemical industry may rebound and rise this year.4.2%，2028 2029The year is expected to continue growing, with an annual growth of approximately.3%。

China's growth will slow under the pressure of tariffs and weak demand.

2023 2024After two consecutive years of strong growth,AtradiusThe growth of chemical production in China is expected to slow down this year.5.5%and predict2026Annual growth is only1.3%。

Particularly as the real estate industry continues to decline, with a significant oversupply and construction levels remaining low, it will greatly affect the demand for chemical products in this key industry.

The effective tariff rate on Chinese goods by the United States is approximately40%In the future, it may be higher, which significantly affects the demand for Chinese imported products in key sectors of the United States.

The loss of exports to the United States can be compensated by increasing exports to the EU, Africa, and Asia.

The Chinese chemical industry is experiencing significant overcapacity, severely affecting the profit margins of Chinese chemical companies.

2024In the year, China has added approximately1870The capacity of tens of thousands of tons of chemical production will eliminate backward production capacity, improve production efficiency, and address the issue of overcapacity in the coming years through targeted policies.

India, strong market demand, and strong government support drive the development of the chemical industry.

AtradiusIt is expected that the output value of India's chemical industry2025The annual meeting is becoming stable, but2026It may increase significantly in the coming years.9%。

The growth in demand for chemical products in India, driven primarily by domestic economic demand, is occurring alongside economic expansion and population growth.

The Indian government's policies also support foreign direct investment, which will continuously stimulate industry growth over the next decade.

From these points of analysis, it seems that the Americans still don't quite understand the style of the Indian government and the cultural environment of India.

Japan's automotive industry's weakness has a serious impact on the chemical industry.

AtradiusThe output value of Japan's chemical industry is expected.2025Annual contraction0.9%，2026Potential growth of the year0.8%。

The automotive industry is a key downstream user of the chemical industry, but it is heavily affected by U.S. tariffs and increasing uncertainties in global trade.

The basic chemical industry enterprises in Japan are under pressure from competition with lower production costs in China and the United States.

The large number of low-cost products from China may lead to losses for Japanese manufacturing companies and even result in the shutdown of production facilities./Factory.

The European Union and the United Kingdom,2025 2026No growth for the year, long-term issues still persist.

AtradiusThe output value of the chemical industry in the eurozone.2025 2026The year will tend to stabilize.

The most critical challenge faced by European chemical production companies is the structurally high energy costs.

The extremely high natural gas prices have weakened their long-term competitiveness against American and Asian competitors.

The tariff policy of the United States may also lead to more Chinese products being exported to Europe, squeezing the market space for local products.

China may continue to expand its production capacity, exacerbating the global oversupply of products and further driving down the prices of global chemical products.

If this is the case, chemical production companies in Europe will find it even more difficult to compete.

In order to reduce production costs and improve operational efficiency, dozens of industry giants in the EU and the UK have been forced to shut down production facilities or factories over the past two years.

Germany is facing another major industry contraction.

2022 2023In the year, the output value of the chemical industry contracted significantly.2024The year briefly recovered.5.2%。

Atradius 2025The year will shrink again.1.3%，2026The year continues to contract.0.6%。

The main reasons are still the continued sluggishness of the German economy, the impact of U.S. tariffs, and the triple blow of global trade uncertainty.

The German automotive industry, currently facing difficulties, is a key downstream user of the chemical industry. The U.S. tariff policy on German automobiles has severely impacted its paint and coating industry.

Atradius 2027At the beginning of the year, the growth rate of the German chemical industry may see a slight recovery, mainly due to the implementation of significant fiscal stimulus plans.

The advantages of the German chemical industry are the integration of the industrial chain, a wide range of product series, and technological advantages in specialty chemicals.

The energy prices caused by the Russia-Ukraine war have severely affected the international competitiveness of Germany's chemical industry.