Monday 28 March 2016

Crude Oil Prices Dip; Specialty Chemicals Gathers Market Shares

Global businesses are still reeling from the plunge in crude oil prices at the onset of 2016. In the light of specialty chemicals market and dependent verticals, this eventually turned tables in its favor. The raw material prices skyrocketed for the commodity chemicals segment, while a slowdown in oil and gas rigs indicated lower prices for oilfield chemicals. On the other hand, market players now shift their focus towards specialty chemicals expecting extended market shares by reducing margins, being the value-addition segment it is for diverse verticals.


Any mention of specialty chemicals might draw a broad picture of industrial applications with extremely complex compounds. A true milieu of the demand segments, however, scales over lesser complex chemicals that are basic to most products put to daily use. These chemicals may be base compounds or specified formulations. User-specific formulations are produced using batch processing methods, depending on their performance or function. Concentration lies upon producing stable chemical complexes that are explicitly typical to their application segment.

Based upon the end consumption market, specialty chemicals can be classified under construction, housing, automotive, and industrial segments. Concrete additives and asphalt modifiers in construction; architectural, coal and wood coatings, chemicals, and advanced materials in housing; motor oil, adhesives, sealants, and lithium-based products in automotive; while, demulsifiers and corrosion inhibitors are required in oilfields.

A simple market overview in itself is evidentiary of the constant dips and hikes in Specialty Chemicals Market segment. Despite all the possibilities, investment interests from new entrants seem undeterred over the time. This positive outlook of the stakeholders, casts incremental influence on the growth projections for the market in the upcoming years. In order to maintain stable growth, industry majors need to outline certain business strategies with context to the current market structure.

The inability of the manufacturers in dynamically adjusting their prices, along with the fluctuations in cost of raw materials and pipeline products, is one major issue that needs attention. Talking along similar lines, companies need to refrain from exchanging goods as commodities, and set differential pricing structure both for upstream complexes and downstream products. Eventually, this shall simplify the pricing structure and help extract greater profit margins in the cyclical industry. Emerging competition from e-vendors is shaping consumer’s expectation and buying tendency differently. In order to keep up with the upcoming consumption trends, the existing players are obliged to work on their sales strategies inclusive of innovative options to choose from, competitive pricing, and optimized availability as per purchase requirements.


Opportunity pockets are showing up in emerging regional markets across the globe. Investors need to pay close attention to regional market and manufacturing activities. Offshore investments for major players to expand their operations should be accountable of labor as well as manufacturing costs. Added to that, there are other inhibitors such as governmental and organizational regulations. Much is
expected out of the upcoming SOCMA’s 9th Annual Washington Fly-In, during April 11 – 12, 2016 which might hold promising regulatory concepts for its participating members. Overall, the industry is expecting enough accommodation for global expansion and investment pockets in specialty chemicals in the latter half of this decade. Allied Market Research has added a report titled World Specialty Chemicals Market - Opportunities andForecast, 2014 – 2020” predicting Asia-Pacific as the fastest growing market with a CAGR of 5.4% during the forecast period. The report holds quantitative and qualitative analysis of the global market structure, key drivers as well as restraints, major participants, their financial strategies and ratios, plus market analysis by geographies for the sake of corporate reference.