Five characteristics and four trends of the development of the global chemical industry

In addition, due to the huge attraction of the downstream markets in India and China, BASF and other companies actively set up sites in India and China to produce upstream raw materials on the spot to supply the local market. Other reasons for chemical giants to speed up close to raw materials and consumption places are that developed economies have weakened support for global integration, and due to the rapid development of chemical technology in emerging economies, the high technical barriers of giants have been difficult to ensure normal profits, must be further in reducing costs, and pay more attention to product market speed when choosing production bases.

Future development presents new trends

1. Industrial structure: Acceleration of adjustment

The complete oil and chemical industry chain, from the beginning of raw materials to the end of the market can be broadly divided into five industrial structure levels:

● The first level is the oil, gas and chemical mining industry;

● The second level is the basic petrochemical industry (olefins, aromatics and triacids and bases, etc.);

The third level is for the general chemical industry (polymers and synthetic fibers, etc.);

● The fourth level is high-end chemical industry (chemical new energy, chemical new materials, high-tech fine chemicals and modern coal chemical industry, etc.);

Level 5 is for emerging edge and cross-cutting industries in chemical industry (life sciences such as genetic engineering and bioengineering, as well as pharmaceutical and environmental engineering, etc.). Level 5 represents the future direction of the chemical industry and the leading exploration of new technologies.

With the gradual maturity of the developed countries' markets and the progress of industrial technology, the world chemical industry is undergoing a new round of industrial structure adjustment and transformation and upgrading, accelerating the improvement of independent innovation capabilities, and constantly improving the level of industrial structure.

On the one hand, the concentration of resource-oriented industries continues to increase, such as energy, biomass, chemical ore conversion, etc.

On the other hand, the customer-oriented segment is becoming more refined and differentiated in terms of product categories, such as new functional materials, electronic chemicals, membrane materials, nanomaterials and catalysts.

International multinational chemical enterprises have never interrupted the adjustment of industrial structure. As in the 1970s, large-scale adjustment to the fine chemical industry, and since the beginning of this century, the pace of industrial structure adjustment of countries in the world, especially petrochemical powers and famous multinational companies has accelerated significantly, and the investment in the fourth and fifth levels of the industry is increasing, and the competition to seize the commanding heights of the future industry technology is becoming more and more fierce. According to the development trends of resources, energy, population, health, and the environment, foreign chemical giants are accelerating the transfer to materials science, life science, and environmental science industries under the promotion of the government.

Regional and feedstock competition has intensified with regional differentiation in raw materials such as natural gas, liquefied natural gas, naphtha and coal. Due to fluctuating raw material prices, the competitiveness of each region is in flux. Global oil and gas supply and demand have reversed, showing a trend of shifting the focus of consumption to the east and the focus of production to the west. In this context, countries have implemented the diversification strategy of petrochemical raw materials, which has led to the intensification of the development of the chemical industry in major regions of the world. Asia has become the main driving force and largest growth point for new capacity and demand in the global petrochemical industry.

2. Corporate Trends: Business focus and merger and reorganization

Multinational chemical enterprises continue to integrate and optimize their business, gradually withdraw from the traditional chemical industry with low added value and high pollution, give up non-core business in order to improve competitiveness, develop in a more specialized direction, and further strengthen their dominant position in a certain field, such as fine and specialized chemicals or new fields of biotechnology-based life sciences such as pharmaceuticals, health care and agriculture.

In order to strengthen business focus, merger and reorganization between enterprises will always be one of the important development strategies of multinational companies. Companies in developed countries will stop or reduce domestic chemical production and turn to resource countries or regions with market development potential. Some companies in emerging economies will move in the opposite direction, seeking more overseas growth opportunities and seeking acquisitions in developed countries. In the context of weakened support for global integration in advanced economies, the overseas development path of emerging economies is particularly important for companies in these regions.