Commodity chemicals (bulk chemicals) are a group of chemicals that are made on a very large scale and act as intermediates to produce other chemicals, which, in turn are used to produce a extensive range of end-user products including construction materials, adhesives, plastics, apparel and tires. Commodity chemicals are the largest sub-segment of the chemical industry. Commodity chemicals are commonly traded under broad categories such as organics, inorganics, plastics resins, synthetic rubbers, fibers, films, explosives and petrochemicals. These broad categories include chemicals such as, acetic acid, acetone, acrylate esters, adipic acid, acrylonitrate, benzene, bisphenol, butadiene, butanediol, butyl acetate, hexane, melamine, polyvinyl chloride, propylene, methanol, methyl, glycol and glycerines. These chemical are very low in product differentiation, and hence making price the dominant economic factor in purchasing decisions for the end users.
The commodity chemical industry is highly fragmented and served with large number of local or regional players. Asia Pacific is by far the largest market for commodity chemicals accounting almost half of the total market. It is followed by North America and Europe. The growth prospective is still high in Asia Pacific attributed to the growing economy and ongoing trend and support for manufacturing sector in the developing countries such as India, China, and Indonesia. Bulk availability of crude oil and natural gas from gulf countries such as Saudi Arabian, Iran, Iraq and Syria is helping the commodity chemical industries in Asia Pacific.
Commodity chemicals serve a wide range of industries ranging from personal care products to aerospace industries. It has its application either directly or indirectly in almost all manufacturing industries. The economy growth and increasing Gross domestic product (GDP) of developed and developing countries around the world is boosting the overall market of commodity chemicals. However the stiff regulation of the governments around the world regarding the health and environment side effect of chemicals and fluctuating prices of crude oil and natural gas are posing significant challenge for the industry.
Some of the major players in commodity chemicals market include, BASF SE, Bayer AG, The Dow Chemical Company, Mitsubishi Chemical Holdings Corporation, PPG industries, Linde Group, Akzo Nobel, LyondellBasell Industries, Asahi Kasei, Sumitomo chemicals, Evonik Industries, INEOS Group Holding and Chem China.
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