Chemical Market Size, Share, Growth & Industry Analysis, By Type (Commodity, Specialty, Agriculture, Others), By End Use (Pharmaceutical, Personal Care, Construction, Manufacturing, Electronics, Automotive, Others), and Regional Analysis, 2024-2031

Market Definition

The market plays a crucial role in global economic development. It encompasses a wide range of products, including raw materials like petrochemicals, which are derived from oil & natural gas, polymers used in plastic manufacturing, and specialty chemicals that serve niche applications in electronics, textiles, and coatings.

Finished goods derived from chemicals are integral to various industries, including agriculture and pharmaceuticals.

Chemical Market Overview

The global chemical market size was valued at USD 5866.67 billion in 2023 and is projected to grow from USD 5995.43 billion in 2024 to USD 7359.73 billion by 2031, exhibiting a CAGR of 2.97% during the forecast period.

The market is driven by an increasing demand for chemicals across key industries such as agriculture, automotive, construction, pharmaceuticals, and food & beverages. Advancements in chemical processing technologies, coupled with rising urbanization and industrialization, are contributing to the market growth, especially in emerging economies.

Major companies operating in the chemical industry are BASF, DuPont, CNPC, LG Chem, Sumitomo Chemical Co., Ltd., LyondellBasell Industries Holdings B.V., Formosa Plastics Corporation, INEOS, The Sherwin-Williams Company, SABIC, Mitsubishi Chemical Group Corporation, Air Liquide, Exxon Mobil Corporation, Henkel AG & Co. KGaA, and Evonik Industries AG.

The market is also registering increased investment in R&D to innovate safer, more efficient products while complying with stringent environmental regulations globally. The increasing focus on circular economy principles and recycling is poised to further drive growth, creating opportunities for industry players.

Key Highlights:

1. The chemical industry size was valued at USD 5866.67 billion in 2023
2. The market is projected to grow at a CAGR of 2.97% from 2024 to 2031.
3. Asia Pacific held a market share of 33.03% in 2023, with a valuation of USD 1937.51 billion.
4. The commodity segment garnered USD 2000.57 billion in revenue in 2023.
5. The electronics segment is expected to reach USD 1592.64 billion by 2031.
6. The market in North America is anticipated to grow at a significant CAGR of 3.06% during the forecast period.

Market Driver

"Increasing Industrialization and Automation"

The chemical market is primarily driven by increasing demand across a broad range of end-use industries, supported by rapid industrialization and urbanization, especially in emerging economies such as China, India, and Brazil.

These economies have registered significant expansion in infrastructure, manufacturing, and consumer product production, which are heavily reliant on chemical products. The demand for chemicals used in manufacturing, processing, and various other applications is growing amid continous industrialization in these countries, driving the market.

The rise of technological advancements, digitalization, and automation in manufacturing processes further fuels this demand, as industries look for more efficient and sustainable solutions.

• For instance, in May 2024, Rockwell Automation, a global leader in industrial automation and digital transformation, successfully hosted the Smart Manufacturing Chemical Summit 2024 in Gujarat, India. The event convened industry experts, thought leaders, and key stakeholders to discuss cutting-edge innovations, emerging trends, and strategic advancements shaping the future of chemical manufacturing.

Market Challenge

"Volatility of Raw Material Prices"

A significant challenge in the chemical market is the volatility of raw material prices, which are influenced by external factors like fluctuating global demand and geopolitical tensions. This price instability can create uncertainty for manufacturers and lead to unpredictable costs for consumers.

Companies can diversify their supplier base, reducing dependence on a single raw material source. Investing in advanced inventory management systems and predictive analytics can help companies better forecast demand and manage stock more effectively.

Another strategy is exploring alternative, more stable raw material sources, such as bio-based or recycled materials, which not only offer cost advantages over the long term but also meet the growing consumer preference for sustainable products.

Market Trend

"Shift Toward Bio-based Chemicals"

The shift toward bio-based chemicals is one of the most significant trends currently reshaping the chemical market. Amid rising environmental concerns and increasing demand for sustainability, bio-based chemicals derived from renewable resources such as plants, algae, and waste products are gaining traction as alternatives to traditional petrochemical-derived chemicals.

These bio-based chemicals are considered environmentally friendly, as they are biodegradable, less toxic, and produce fewer Greenhouse Gas (GHG) emissions during production. The trend of bio-based chemicals not only supports sustainability goals but also creates business opportunities for chemical companies committed to innovation and environmental responsibility.

• For instance, in January 2024, GODAVARI BIOREFINERIES LTD. launched a new chemical plant, expanding its production capacity and strengthening its position in the growing bio-based chemicals market. The facility aims to meet the rising demand for sustainable chemical solutions, further aligning with global trends of eco-friendly and renewable chemical alternatives.

Chemical Market Report Snapshot

Market Segmentation:

• By Type (Commodity, Specialty, Agriculture, Others): The commodity segment earned USD 2041.36 billion in 2023, due to the widespread use of bulk chemicals in large-scale manufacturing processes and the growing demand for basic chemicals across various industries.
• By End Use (Pharmaceutical, Personal Care, Construction, Manufacturing, Electronics, Automotive, and Others): The manufacturing segment held 21.12% share of the market in 2023, due to the increasing need for chemicals in the production of machinery, equipment, and intermediate goods.

Chemical Market Regional Analysis

Based on region, the global market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America.

Asia Pacific accounted for around 33.03% chemical market share in 2023, with a valuation of USD 1937.51 billion. This dominance is attributed to the rapid industrialization, urbanization, and robust manufacturing activities in countries such as China, India, and Japan.

The increasing demand for both commodity and specialty chemicals in the region, coupled with the growing adoption of sustainable and bio-based solutions, further drives its market share. Additionally, the expansion of infrastructure and the rise of emerging economies in the region continue to fuel growth, positioning Asia Pacific as a key player in the global market.

• In November 2024, according to India Brand Equity Foundation, India ranks as the sixth biggest producer of chemicals globally and the third largest in Asia, contributing 7% to the nation's GDP. The chemical industry in India is currently valued at USD 220 billion and is projected to grow to USD 300 billion by 2030, with further expansion to USD 1 trillion by 2040.

The chemical industry in North America is poised to grow at a CAGR of 3.06% over the forecast period. This growth is driven by the increasing demand for advanced chemicals in industries such as pharmaceuticals, personal care, and agriculture. The region is also registering substantial investments in sustainable chemical solutions, particularly bio-based products.

Additionally, the presence of major chemical manufacturing companies and continuous innovation in R&D are expected to support North America's growth trajectory in the coming years.

Regulatory Frameworks:

• In the U.S., the Environmental Protection Agency (EPA) regulates the manufacturing, distribution, and use of chemicals under laws such as the Toxic Substances Control Act (TSCA), which requires chemical manufacturers to report and test chemicals for potential environmental and health risks.
• In Europe, the European Chemicals Agency (ECHA) is the primary regulatory authority overseeing the market. It plays a crucial role in ensuring the safe use of chemicals, promoting innovation, and enhancing global competitiveness.
• In India, the Department of Chemicals and Petrochemicals (DCPC) under the Ministry of Chemicals and Fertilizers plays a crucial role in shaping India’s chemical manufacturing sector. It is responsible for formulating policies, promoting growth, and ensuring regulatory compliance within the chemical and petrochemical industries.

Competitive Landscape:

The global chemical market is characterized by a large number of participants, including established corporations and rising organizations. Key players in the market are actively driving innovation and advancing technology to strengthen their position in an expanding industry.

With applications across various sectors such as manufacturing, agriculture, pharmaceuticals, and consumer goods, companies are consistently improving their product portfolios to meet specific industry needs. Businesses are focusing on regional expansion as the market registers robust growth, tailoring their solutions to address local demands while scaling operations to capitalize on opportunities in global markets.

Additionally, there is a growing emphasis on sustainability, with many players investing in eco-friendly and bio-based alternatives to meet the increasing demand for greener chemical solutions. Strategic partnerships, mergers, and acquisitions are also being pursued to enhance product offerings, expand market reach, and leverage synergies across regions.

The competitive landscape is becoming more dynamic, with businesses innovating to stay ahead of regulatory changes and emerging market trends.

• In July 2024, Zymochem launched the first scalable biodegradable and 100% bio-based Super Absorbent Polymer (SAP) BAYSE. This breakthrough innovation aligns with the growing demand for sustainable chemical solutions, offering an eco-friendlier alternative to traditional SAPs and positioning Zymochem at the forefront of the green market.

List of Key Companies in Chemical Market:

• BASF 
• DuPont
• CNPC
• LG Chem
• Sumitomo Chemical Co., Ltd.
• LyondellBasell Industries Holdings B.V.
• Formosa Plastics Corporation
• INEOS 
• The Sherwin-Williams Company
• SABIC
• Mitsubishi Chemical Group Corporation 
• Air Liquide
• Exxon Mobil Corporation
• Henkel AG & Co. KGaA
• Evonik Industries AG

Recent Developments (M&A/Partnerships/New Product Launch)

• In February 2025, BASF launched the first polyacrylate-based superabsorbent polymer, HySorb B 6610 ZeroPCF with a zero product carbon footprint, achieved through renewable energy and a biomass balance approach.
• In January 2025, Mitsui Chemicals Inc. launched a new high-performance polymer product designed to meet the growing demand for sustainable and eco-friendly solutions in the market. This innovation reinforces Mitsui Chemicals' commitment to advancing material science while addressing global environmental challenges in various industrial applications.
• In April 2023, Mitsubishi Chemical Group announced a merger with its subsidiary, Mitsubishi Chemical Systems, Inc. (MCSY). This integration aligns with the group's strategy to streamline operations and strengthen its IT and digital capabilities, enhancing flexibility and speed in global IT implementations for its chemical operations.