COVID-19 has added yet another dimension of uncertainty in the chemical industry in 2020. While late 2019 estimates already expected a drop in overall manufacturing levels for 2020, current events have caused a reset on demand expectations . The strength in demand for medical and food packaging applications contrasts sharply with severe declines in demand for the automotive sector.
The chemical industry is closely tied to its end markets, and despite past gains in construction-related chemicals, home builder confidence in the US is at its lowest level since 2012. Medical, hygiene, and food packaging markets are benefiting from demand surges due to the pandemic. In some cases, demand has shifted from B2B to B2C channels, causing shifts in production capacities. Demand in these sectors should remain strong throughout 2020.
In these conditions, chemical companies are expected to invest in innovation and look for new growth opportunities, revenue streams, and technology development.
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