Global outlook and growth

• Sharp slowdown: World chemical production growth is expected to be just 0.6% in 2026, a figure well below (1.6 points lower) than pre-Gulf conflict estimates.
• Adverse scenario: If the conflict is prolonged and the Strait of Hormuz remains closed until September, global production could contract by -1.7%.
• Impact by subsectors: While paints and coatings will grow by 3.1%, agrochemicals will suffer a 2.4% drop and soaps/detergents a slight contraction of 0.3%.

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Critical impact factors

• Energy and raw materials crisis: The chemical industry is one of the most affected by the Gulf War, as oil and gas are key raw materials for which there are few alternatives. The Gulf supplies 50% of ethylene glycol exports and 40% of methanol.
• Trade uncertainty: There is great fear that China’ s overcapacity will divert cheap products to Europe, undermining demand for local production.

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Performance by major regions

• Europe: A 2.2% contraction is expected. Germany, the largest European producer, will suffer a 4.7% drop due to its high exposure to energy volatility and global competition.
• United States: Slight decline of 0.5% expected. However, the US maintains a competitive cost advantage thanks to its shale gas reserves.
• Asia-Pacific:
  • China: Its growth will slow to 2.7% due to lower external demand and overcapacity problems.
  • India: This is the bright spot, with forecast growth of 4.7% driven by robust domestic demand and government support.
  • Japan: It will suffer one of the largest declines(-4.8%) due to its almost total dependence (95%) on Middle East oil.

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Future opportunities and challenges

• Growth drivers: As commodity chemicals (such as ethylene or methanol) suffer a lot of price competition, the opportunity lies in moving into specialty chemicals (especially in Europe and Japan), which are higher quality products, premium prices and better margins.
• Energy transition: Decarbonization is both a challenge and a necessity; companies face large investments and regulatory pressures to comply with environmental standards. Those that cannot invest in these innovations risk being priced out of the market in favor of larger, more efficient players.