Chemical Week
Navigating the 2025 chemical landscape: growth, challenges, and future strategies in Europe and China
Jan 14, 2025
The discussion covers Europe's chemical sector grappling with high energy costs and low demand, amid a backdrop of geopolitical issues. It highlights the push for sustainability and innovation, yet stresses the challenges of overcapacity. Meanwhile, China's chemical industry is seeing a boost from government stimulus, spurring demand in petrochemicals, but faces trade tensions with the US. The country also aims for net-zero emissions by 2060, grappling with the transition to renewable products and enhancing plastic recycling efforts.
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Quick takeaways
- Europe's chemical sector faces significant recovery challenges from high energy costs and weak demand, despite a projected 1.4% growth in 2025.
- China's chemical industry benefits from government stimulus and construction activity, yet remains vulnerable to US trade tensions and petrochemical overcapacity risks.
Deep dives
Current State of Europe's Chemical Sector
Europe's chemical industry is experiencing a slight recovery with a projected growth of 1.4% in 2025, following an 8.1% decline in 2023 mainly due to the war in Ukraine. Despite the increase, this recovery comes off a low base and is hampered by structural challenges such as high energy and feedstock costs, weak demand, and global overcapacity. In 2024, the eurozone's GDP grew by only 0.7%, indicating sluggish economic conditions that negatively affect demand for chemical products. The situation is compounded by the halt of natural gas transit from Russia, which has increased pressure on Europe’s energy supply and subsequently impacted the chemical sector.
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