Specialty Chemicals Market

Specialty chemicals, also known as effect chemicals or specialties, are a group of particular chemical products, which provide a wide range of applications, usage, and effects to serve highly dependent industry sectors such as chemicals, paints & coatings, plastics, automotive, construction, textile, and food & beverages among others. The specialty chemicals are broadly categorized into agrichemicals, cosmetic additives, cleaning materials, adhesives, construction chemicals, elastomers, fragrances, flavors & food additives, industrial gases, polymers, lubricants, surfactants, and textile auxiliaries. Specialty chemicals are also called performance chemicals as they are chosen on the basis of their performance or function. These types of chemicals are either unique or virgin molecules or a blend or reactive mixtures of different molecules, which are known as a formulation.

In terms of value, the global specialty chemicals market was pegged at USD 751.52 billion in 2018 and is projected to reach USD 1,165.97 billion by 2025 at a healthy CAGR of 6.44% over the forecast period. On the other hand, in terms of volume, the global market was valued at 1457.1 million tons in 2018 and is estimated to grow at a significant CAGR of 5.57% during the forecast period to attain the mark of 2,134.9 million tons by the end of 2025. During the last two decades, the global demand for overall specialty chemical has witnessed a positive outlook. In the coming years, this trend is likely to continue, and the market is set to grow at robust growth rate due to a considerable rise in the demand from the major end-use industries such as building & construction, paints & coatings, cosmetics & personal care, agrochemicals, automotive, consumer goods, and other industrial applications.

The protuberant factors responsible for this market growth are diverse and wide application scope of specialty chemicals, slow yet steady and continuous shift from commodity to specialty chemicals, and favorable trends in automotive industry, which is one of the largest consumers of specialty chemicals. Additionally, rapid industrialization and growing urbanization have significantly influenced the trade and dynamics of the major economies across the globe. On the other hand, consistent rise in population and consequent increase in dependency on textile, food additive, consumer goods, and infrastructure are ensuring demand for specialty chemicals to some extent. Moreover, major end users are switching from the bulky commodity chemicals to the high value and low volume specialty chemicals to bring about the more economic rise in production. However, the market is not barred from the bottlenecks. The fluctuations in crude oil prices are likely to hamper the growth momentum of the market in the longer run. Crude oil has been witnessing frequent fluctuations since 2011 when the prices hit an all-time high of USD 100 per barrel and then drastic fall in 2014 to less than USD 45 per barrel. Thereafter, there is an oil cut from OPEC (Organization of the Petroleum Export Countries), which again triggered the price rise in the global market.

According to Wantstats, the global specialty chemicals market is segmented on the basis of source, type, and region. By source, the market is segmented into crude oil, naphtha, ethane, propane, butane, wood, and others; naphtha segment accounted for the largest share of the market. It is estimated to reach USD 842.87 billion at a healthy CAGR of 6.20% by the end of the forecast period. Based on the type, the market is broadly classified into agrochemicals, flavors ingredients, fragrances ingredients, dyes & pigments, personal care active ingredients, water treatment chemicals, construction chemicals, surfactants, textile chemicals, polymer additives, bio-based chemicals, and others. The agrochemicals segment remained dominant with the market share of 33.20% in 2018 and is projected to reach USD 339.32 billion by the end of the year 2025.

Geographically, during 1970-1990, Europe and North America were the prominent consumers of the specialty chemicals due to early industrialization and technological advancements. After the emergence of major industries in Central and South Asian economies, the market has become the leading consumers of the specialty chemicals. Asia-Pacific dominated the global specialty chemicals market by holding 52.9% share of the global market in 2018. This is mainly attributed to surging demand from the well-spread textile and agrochemicals industry, government policies favoring the growth of the construction sector, and dynamic economic scenario in emerging countries such as India, China, South Korea, Thailand, Indonesia, and Myanmar among others. Moreover, improving standards of living and increasing disposable income of the people are driving the demand for the product. The market in Asia-Pacific is estimated to reach USD 675.01 billion at a CAGR of 7.80% by the end of 2025.