The global chemical industry expects a slow and steady recovery in demand during 2025, according to a recent report released by B&K Research. The report states that while 2024 delivered some improvement in volumes across various segments, overall industry performance remained modest. Companies continue to maintain a cautiously optimistic stance for the upcoming year. “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 stated.

Volume Growth Drives 2024 Performance

Chemical, specialty chemical, and agrochemical companies reported their fourth quarter and full-year results for FY24 and calendar year 2024, with volume increases driving most of the reported growth. However, pricing trends across segments remained weak, which indicated that the recovery lacked breadth. The report noted that pricing pressure continued to weigh on revenues, despite the volume gains.

End of Inventory Destocking Marks Key 2024 Development

One of the significant developments in 2024 was the conclusion of the prolonged global inventory destocking cycle. This phase had previously affected demand and reduced sales visibility for several quarters. B&K Research highlighted that the destocking process largely came to an end by the close of 2024. As a result, companies posted year-on-year volume growth, supported by improved visibility and stabilized inventory levels.

The agrochemical segment continued to navigate inventory- challenges. Although the excess inventory pressures reduced significantly, concerns remained. Despite this, agrochemical companies reported year-on-year volume growth in 2024, even as they operated in a difficult pricing environment. The report acknowledged this resilience but pointed out that pricing trends showed limited improvement.

Mixed Sentiment for 2025

For 2025, the overall outlook for the chemical sector remains mixed. Some companies anticipate a gradual recovery in demand, while others approach the year with caution. B&K Research reiterated, “Even with the optimistic view, demand growth is expected to be gradual.” Agrochemical firms forecast further volume growth as inventory normalization progresses. However, low farm product prices and continued pricing pressures could hinder momentum.

According to the report, any recovery in global chemical, specialty chemical, and agrochemical volumes could support growth in the Indian chemical sector. This potential uplift, however, may not be accompanied by significant pricing support, barring any impact from recent tariff changes.

(With Inputs From ANI)