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
Jan 20, 2025 - Payrolls Rising Amid Falling Sales
- Employment by basic chemical manufacturers grew by 1.4% in October compared to a year ago, while the average industry wage rose 6.9% over the same period to $40.17 per hour, according to the latest US Bureau of Labor Statistics data. Low demand and industry destocking continued to depress chemical manufacturers’ pricing power in November with producer prices falling 2% year over year after declining 8.9% in the previous November-versus-November annual comparison, BLS data show. Payrolls are rising amid falling sales, with sales for basic chemicals, resins, and synthetics companies down 6.6% in the third quarter of 2024 compared to a year ago and unchanged from the previous quarter, according to the Census Bureau.
- Dragged down by the weak industrial and construction sectors – major consumers of basic chemicals – in 2024, the American Chemistry Council (ACC) is predicting a better year for chemicals in 2025. The trade group estimates that US chemical output, excluding pharmaceuticals, declined by 0.4% in 2024, but expects growth to resume at a 1.9% rate this year. That’s compared to a predicted 0.4% decline in output last year, on the heels of a 0.2% decline in 2023. “The industrial sector, which of course is where chemicals play, remains pretty stagnant,” the ACC’s chief economist, Martha Moore, said in December. An exception has been the electronic materials sector, where business is booming because of construction of data centers and semiconductor fabrication plants. The ACC forecasts that sales of chemicals used in electronics will grow 8% this year. While the council expects lower interest rates to spur more spending in major chemical-consuming sectors, tariffs remain a wildcard.
- 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.
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