BASF Report 2021

Outlook for the Chemical Industry

Global chemical production (excluding pharmaceuticals) is expected to grow by 3.5% in 2022, slower than in the previous year (2021: 6.1%) but still above the average for the years prior to the coronavirus pandemic. In the advanced economies, we anticipate growth of 3.1% (2021: 3.9%), which is above the average for the pre-crisis years. Growth in the emerging markets is expected to slow at a much stronger rate (2022: +3.7%; 2021: 7.2%). Based on these forecasts, global chemical production at the end of the year will be almost 10% above the 2019 level.

In China, the world’s largest chemical market, we are forecasting much weaker growth in chemical production of 4.0% as base effects from the previous year level off (2021: 7.7%). Growth in demand for chemicals in the consumer goods industries and from the electronics industry is expected to weaken. We anticipate continued growth in demand from the Chinese automotive industry. In the other emerging markets of Asia, we expect chemical growth to be slightly weaker than in China.

In the E.U., we expect chemical production to increase by 2.8% (2021: 6.0%). We anticipate a significant recovery in the automotive industry, which will strengthen growth in demand for chemicals. For the other customer industries, we are forecasting growth slightly above the long-term average. However, momentum in chemical production already slowed over the course of 2021. As a result, the European chemical industry will presumably grow below the average for the manufacturing sector. We are assuming growth of 2.0% in the United Kingdom (2021: 2.5%).

For the United States, we are forecasting significantly stronger growth in chemical production (2022: 4.5%; 2021: 1.8%) following the weather-related production outages in the previous year. In addition to statistical base effects, we expect growing demand above all from the automotive industry, the energy sector and the consumer goods industry.

In Japan, we expect growth in chemical production to track the growth rate for GDP. The strongest growth stimulus will be provided by the electronics industry and the automotive sector (2022: 2.5%; 2021: 3.7%).

Chemical production in South America will presumably grow at around the same rate as the economy as a whole (2022: 1.5%; 2021: 4.6%). This will be primarily driven by the significant recovery in automotive production and continued moderate growth in demand from agriculture and the raw materials sector.

Outlook for chemical production 2022 (excluding pharmaceuticals)

Real change compared with previous year

Outlook for chemical production 2022 (excluding pharmaceuticals) (Real change compared with previous year) (bar chart)

Trends in chemical production 2022–2024 (excluding pharmaceuticals)

Average annual real change

Trends in chemical production 2022–2024 (excluding pharmaceuticals) (Average annual real change) (bar chart)