Basic Chemical Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,245 basic chemical manufacturers in the US produce commodity chemicals that act as raw materials or catalysts for producing more refined chemicals. Products include petrochemicals, industrial gases, synthetic dyes and pigments, inorganic chemicals, and organic chemicals.
Price-based Competition
The basic chemical industry is highly competitive, and products are generally considered commodities.
Capital Intensity
Basic chemical manufacturing is capital-intensive and generally requires large investments in property, facilities, and equipment.
Industry size & Structure
A typical basic chemical manufacturer employs about 125 workers and generates about $198 million annually.
- The basic chemical manufacturing industry comprises about 1,245 companies that employ 156,000 workers and generate $253 billion annually.
- The industry is concentrated, with the 20 largest firms accounting for 52% of industry revenue.
- Large companies include BASF, Linde, LyondellBasell, and Air Products.
- Some large companies, such as Dow Chemical and DuPont, produce basic chemicals in addition to other products, including specialty chemicals and other downstream products.
Industry Forecast
Basic Chemical Manufacturers Industry Growth
Recent Developments
Nov 20, 2024 - Rising Payrolls
- Employment by basic chemical manufacturers grew by 1.7% in September compared to a year ago, while the average industry wage rose 5.3% over the same period to $40.44 per hour, according to the latest US Bureau of Labor Statistics data. Meanwhile, low demand and industry destocking continue to depress chemical manufacturers’ pricing power. Producer prices fell 2.4% year over year in September after declining 7% in the previous September-versus-September annual comparison, BLS data show. Payrolls are rising amid falling sales, with sales for basic chemicals, resins, and synthetics companies down 4.3% in the second quarter compared to a year ago, but up 2.9% from Q1, according to the Census Bureau.
- Chemical production increased in 2024 versus a year ago and is expected to continue to rise in 2025 as the destocking cycle that plagued the industry in 2023 eases and demand rises across most products, according to the American Chemistry Council’s (ACC) mid-year outlook report. To support further revenue growth, chemical manufacturers have announced cost-reduction measures and are increasing margins while continuing to invest in decarbonization and innovation, according to a November Deloitte Research Center for Energy & Industrials report. The chemical industry is expected to see moderate growth in 2025, with the ACC projecting global chemical production to rise by 3.4% in 2024 and 3.5% in 2025, after increasing just 0.3% in 2023. Challenges ahead for chemical manufacturers as they position themselves to compete in the low-carbon, high-tech future include shifts in policy and regulations under a new US administration, changing customer preferences, and technological advances.
- Legislation introduced in Congress in July would enhance safety requirements for trains transporting hazardous materials, according to a press release from the Alliance for Chemical Distribution (ACD), which supports the bill. HR 8996 would incorporate aspects of freight-rail safety legislation introduced in the Senate last year and set federal limits on the length of freight trains. The proposed legislation also would raise standards on tank cars carrying hazardous materials, mandate two-person train crews, and set standards for rail-car maintenance, track maintenance, and wayside defect detectors. Freight railroads moved 2.3 million carloads of plastics, fertilizers, and other chemicals in 2022, or about 20% of chemicals used in the US. The 2023 derailment of a Norfolk Southern Railway train in East Palestine, Ohio, carrying several types of chemicals that caught fire, spotlighted rail safety.
- Under a new EPA rule aimed at reducing the risk of cancer for people living near industrial sites, over 200 US chemical plants will be required to curb their emissions, The New York Times reported in April. The rule specifically targets ethylene oxide, a chemical that’s used to sterilize medical devices, and chloroprene, used in the manufacturing of rubber in footwear. The EPA has classified both chemicals as likely carcinogens. Most of the facilities impacted by the rule are in Texas, Louisiana, and elsewhere along the Gulf Coast and in the Ohio River Valley and West Virginia, according to NYT. EPA Administrator Michael Regan said the new rule will cut toxic pollutants by 6,200 tons annually and reduce emissions of ethylene oxide and chloroprene by 80%. Under the new rule, chemical manufacturers must monitor vents and storage tanks for ethylene oxide and chloroprene emissions and plug any leaks.
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