Chemical Industry to see gradual demand recovery in 2025: Report

New Delhi [India], May 12 (ANI): Even in the optimistic view the global chemical industry is expected to witness a gradual recovery in demand during 2025, according to a recent report by B&K Research.

The report highlights that while 2024 saw some improvement in volumes across segments, the overall performance was modest and companies remain cautiously optimistic about the year ahead.

It said "After a modest 2024 performance, Chemical companies' outlook for 2025 remains mixed, with some expressing concerns about demand recovery, while others remaining optimistic. Even with the optimistic view, demand growth is expected to be gradual".

The report said that global chemical, specialty chemical, and agrochemical companies reported their fourth quarter and full-year results for FY24 and calendar year 2024, with growth largely driven by volume increase.

However, pricing trends remained weak across segments, indicating that the recovery was not broad-based.

One of the key developments during 2024 was the end of the prolonged phase of global inventory destocking in the chemicals and specialty chemicals sectors.

The report noted that this destocking phase, which had impacted demand and sales visibility, largely came to a close by the end of 2024. This, in turn, allowed companies in these segments to post year-on-year volume growth.

In contrast, the agrochemical segment continued to face inventory challenges. Although the pressure from excess inventory has reduced substantially, it still remains a concern.

Despite this, agrochemical companies also reported year-on-year volume growth in 2024, navigating through a tough pricing environment.

Looking ahead to 2025, the outlook for the chemical industry remains mixed. While some companies are hopeful about a recovery in demand, others are more cautious. Even among the optimistic players, the report said demand growth is expected to be slow and gradual.

Agrochemical companies are forecasting further volume growth in 2025 as inventories continue to normalise. However, low farm product prices could act as a dampener, and pricing pressures are likely to persist.

Importantly, the report noted that any volume recovery in global chemicals, specialty chemicals, and agrochemicals is expected to support growth in the Indian chemical sector as well. But this recovery is expected to come without meaningful support from pricing trends, excluding any potential effects from recent tariff changes.