BASF Report 2023

Outlook for the Chemical Industry

Global chemical production (excluding pharmaceuticals) is expected to grow by 2.7% in 2024, faster than in the previous year (2023: +1.7%). We anticipate weak growth in production in the advanced economies following the sharp decline in the previous year (2024: +0.8%, 2023: –4.9%). Growth in the emerging markets is expected to slow slightly (2024: +3.5%, 2023: +4.8%).

In China, the world’s largest chemical market, we are forecasting lower but still high growth in chemical production of 4.0% following the strong growth in the previous year (2023: +7.5%). We expect growth stimulus to come primarily from the consumer goods and electronics industries. Following the considerable decline in chemical production in the other emerging markets of Asia, we expect a gradual recovery (2024: +3.0%, 2023: –2.4%). The main growth driver is India with expected growth of 4.5%.

We anticipate gradual stabilization in the E.U. Although the situation for the European chemical industry remains challenging in view of its high cost level by international standards and the weak global industrial economy, production is expected to stabilize at the current low level (2024: +0.8%) following the sharp declines of previous years (2023: –7.6%, 2022: –5.2%). This trend was already evident in the course of 2023. The considerable fall in gas prices and the slow recovery in demand for goods due to gains in purchasing power are expected to support demand for chemicals in Europe.

Demand for chemicals is also expected to recover slightly in the United States (2024: +1.1%, 2023: –1.0%) following the previous year, which was characterized by destocking and weak industrial growth. We anticipate slight growth for most customer industries in the manufacturing sector. Further growth is also expected for the automotive industry in North America. However, developments remain uncertain against the backdrop of high interest rates and the associated risk of recession, particularly with regard to the construction sector.

For Japan, we are forecasting stagnation in chemical production after the sharp decline in the previous year (2024: 0.0%, 2023: –6.6%). Following very strong growth in the previous year, automotive production is expected to fall. Although the other customer industries are compensating for this decline overall, they are unlikely to provide any additional growth stimulus.

In South America, chemical production will presumably grow slightly (2024: +1.3%; 2023: –4.7%). We expect to see slowly increasing demand from the consumer goods industries and growing automotive production. Demand for chemical products from the agricultural sector is also expected to continue to grow.

Outlook for chemical production 2024 (excluding pharmaceuticals)

Real change compared with previous year

Outlook for chemical production 2024 (excluding pharmaceuticals) (Real change compared with previous year) (bar chart)

Trends in chemical production 2024 – 2026 (excluding pharmaceuticals)

Average annual real change

Trends in chemical production 2024–2026 (excluding pharmaceuticals) (Average annual real change) (bar chart)

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