Chemical Intermediate Market

Growing demand for chemical intermediates from end-user industries is driving the market growth.

Market CAGR for chemical intermediates is being driven by the rising demand for chemical intermediates from end-user industries. The production of a comprehensive range of chemicals requires chemical intermediates as an important component. Therefore there is an increasing requirement to generate a large range of chemicals in the business. In order to make a vast range of compounds, chemical intermediates are used as a building component.

The chemical intermediates are largely being used to generate agricultural chemicals like fertilizers and insecticides. Thus, increasing agricultural production is the prime booster of the chemical intermediate market growth. Additionally, the pharmaceutical section also frequently utilizes chemical intermediates for the production of medicines. The rise of the chemical industry in healthcare is due to the increasing disease prevalence and ongoing strive to produce new treatments. With the use of 1-hydroxy hexane-2, and 5-dione as a chemical intermediary, there is an increasing need for bio-based 5-hydroxymethylfurfural building blocks that further help the intermediate chemical market to grow globally.

The HMF building blocks can be cured in high yield from biomass and converted to different interesting products in simple steps. In order to make possible the conversion of HMF to 1-hydroxy hexane-2, 5-dione (HHD), various researchers have been researching it over the last two decades. Through a hydrogenation ring-opening reaction, the HMF can be converted to HHD in an aqueous phase with different homo and heterogeneous catalysts.

The recent developments in the use of HHD as a building block for different useful compounds, inclusive of cyclopentanone derivatives, pyrroles, and triols, and also state-of-the-art HHD synthesis, consisting of mechanistic aspects of its creation. Thus the demand for chemical intermediates is rising due to the popularity of the bio-based chemical intermediate building blocks. The chemical intermediate is also being acquired for the purpose of coatings and is used in plastic manufacturing. The advancement in technology has led to the development of better and new avenues by the manufacturers of chemical intermediates. Thus, driving the Chemical Intermediate market revenue.

However, the growth of the market can be hampered due to the differences in the prices of the raw materials. Also, the primary raw materials consist of the downstream components of crude oil that are required to create chemical intermediates. Hence, crude oil demand volatility also affects the cost of the raw materials utilized in chemical intermediates. Furthermore, the difficulty in the production of bio-based chemical building blocks acts as a commercial restraint.

In March 2024, the International Chemical Investors Group (ICIG) completed the purchase of a controlling interest in Vasant Chemicals, a well-known Indian company that produces specialty chemicals and pharmaceutical intermediates. Vasant Chemicals will now be part of the WeylChem Group, which is the fine chemicals division of ICIG. This acquisition forms part of WeylChem's plan to increase its footprint in the global specialty chemicals market.

The Global Chemical Intermediate Market Industry experiences robust growth driven by increasing demand from various end-user sectors such as pharmaceuticals, agrochemicals, and plastics. As of 2024, the market is valued at approximately 117.8 USD Billion, reflecting a strong need for chemical intermediates that serve as essential building blocks in the production of final goods. For instance, the pharmaceutical sector relies heavily on chemical intermediates for drug formulation, while the agrochemical industry utilizes them for pesticide production. This trend suggests a sustained expansion of the market as these industries continue to innovate and grow.

Investment in research and development is a key driver of the Global Chemical Intermediate Market Industry. Companies are increasingly allocating resources to innovate and develop new chemical intermediates that meet evolving market demands. This focus on R&D not only enhances product offerings but also fosters collaboration between academia and industry, leading to breakthroughs in chemical synthesis and applications. For instance, the development of novel intermediates for specialty chemicals can open new avenues for growth. As R&D efforts intensify, they are likely to propel the market forward, aligning with the overall growth projections.

The Global Chemical Intermediate Market Industry is significantly impacted by global economic growth and industrialization trends. As economies expand, there is a corresponding increase in industrial activities, leading to heightened demand for chemical intermediates across various sectors. Emerging economies, in particular, are witnessing rapid industrialization, which fuels the need for chemical intermediates in manufacturing processes. This trend is likely to bolster the market, contributing to its projected growth trajectory. The anticipated market size of 263.2 USD Billion by 2035 underscores the potential for continued expansion driven by these economic factors.

The Global Chemical Intermediate Market Industry is influenced by increasing regulatory support for sustainable practices. Governments worldwide are implementing stringent regulations aimed at reducing environmental impact and promoting the use of eco-friendly chemical processes. This regulatory landscape encourages manufacturers to adopt sustainable practices, such as using renewable feedstocks and minimizing waste. As a result, companies that align with these regulations may gain a competitive edge, potentially leading to increased market share. The focus on sustainability is expected to drive the market further, aligning with the projected CAGR of 7.58% from 2025 to 2035.

Technological innovations play a pivotal role in shaping the Global Chemical Intermediate Market Industry. Advanced production techniques, such as green chemistry and process optimization, enhance efficiency and reduce environmental impact. These advancements not only lower production costs but also improve product quality, making chemical intermediates more appealing to manufacturers. For example, the adoption of biocatalysis in chemical synthesis has shown promise in increasing yield and reducing waste. As these technologies evolve, they are likely to drive market growth, contributing to an anticipated market size of 263.2 USD Billion by 2035.

By region, the study offers market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The North American Chemical Intermediate market area dominates the market with the increasing utilization of chemical intermediates in chemical industries. There is an increasing amount of investment in the research and development section for boosting the regional chemical intermediate market growth.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, Japan, India, China, Australia, South Korea, and Brazil.

Figure 2: GLOBAL CHEMICAL INTERMEDIATE MARKET SHARE BY REGION 2022 (USD Billion)                       

Source: The Secondary Research, Primary Research, Market Research Future Database, and Analyst Review

The Asia-Pacific Chemical Intermediate Market accounts for the second-largest market revenue due to the surging demand for chemical intermediates in this region's textile and leather industries. Moreover, China’s Chemical Intermediate market held the largest market share, and the Indian Chemical Intermediate market was the rapid-growing market in the Asia-Pacific region.

Europe's Chemical Intermediate market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to the increasing requirement in different industries in this region. Further, the German Chemical Intermediate market held the largest market share, and the UK Chemical Intermediate market was the rapid-growing market in the European region.

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the Chemical Intermediate market grow even more. Market participants are also undertaking various strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the Chemical Intermediate industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers used in the global Chemical Intermediate industry to benefit clients and increase the market sector. In recent years, the Chemical Intermediate industry has offered some of the most significant advantages to the chemical industry. Major players in the Chemical Intermediate market, including Deepak Nitrite Ltd., BASF SE, Rossari Biotech Ltd., INVISTA Nylon Chemical Co. Ltd., Stepan Company, LG Royal DSM, Chevron Corporation, Himalaya Chemicals, Akzo Nobel NV, and others, are attempting to increase market demand by investing in research and development operations.

BASF is the world's leading chemical company. In March 2016, the company concluded its two-step capacity expansion for the intermediate chemical 1,4-butanediol (BD) by roughly 20 percent at its Verbund site in Geismar, Louisiana, while the first quarter of 2016. the investment raised the production capacity by implementing measures to fuel efficiency and enhanced infrastructure. With this expansion, BASF decided to strengthen its position in the market of South and North America and meet the growing chemical intermediate requirement of the customers from the local assets in Geismar.

Additionally, BASF invested in various products in North America, recently in formic acid, to spread the firm availability in the market and the commitment to the customers. BASF is a Tire-1 Company in the market of intermediate chemicals, and the expansion strategy of the company will boost the market growth.

Long-term access to QIRA® bio-based 1,4-butanediol (BDO) will be granted to BASF in 2023 by Qore® LLC (Qore), a joint venture between Cargill and HELM AG. To this end, BASF and Qore have reached a mutual understanding. At Cargill's biotechnology campus and corn refining facility in Eddyville, Iowa, Qore will manufacture the bio-based BDO. With QIRA, BASF will add bio-based versions of BDO derivatives, such as polytetramethylene ether glycol (polytetrahydrofuran, or PolyTHF) and tetrahydrofuran (THF), to its current portfolio. It is anticipated that the first commercial amounts will be accessible in Q1 2025.

AdvanSix, a diverse chemical firm, said today that three of its manufacturing locations—Frankford, Pennsylvania; Hopewell, Virginia; and Chesterfield, Virginia—have received certification to the International Sustainability and Carbon Certification (ISCC) PLUS level for 2024. An internationally renowned optional certification program for creating sustainable supply chains is called ISCC PLUS. The ISCC PLUS certification, which is confirmed by a

Deepak Nitrite Ltd., is a company of chemical manufacturer in India. Deepak Nitrite generates a wide range of chemicals, inclusive of colorant, agrochemicals, rubber, specialty, and fine chemicals, and pharmaceuticals. In September 2017, an ambitious target to attain USD 1 billion in turnovers was set by intermediate chemicals major Deepak Nitrite in the next three to four years, along with its 1,400 crore rupees phenol-acetate facility at Petroleum, Chemicals And Petrochemicals Investment Region (PCPIR) in Dahej, Gujarat. The largest phenol-acetone plant is being set up by the company at Dahej PCPIR, with a capacity of about 200,000 tonnes per year.

Upon the commissioning of the project, it will create many new opportunities for India's intermediate chemical market.