Recently, North American market analysts indicated that the global chemical industry will continue to face multiple challenges in 2026 following the turbulence of 2025. Persistent supply-demand imbalances, coupled with heightened policy and geopolitical uncertainties, will amplify market volatility, leaving the sector hovering near its bottom. Despite these difficulties, global chemical production is still projected to grow, albeit at a significantly slower pace.

Data released by the American Chemistry Council (ACC) indicates that global chemical production growth will decline from 2.6% in 2025 to 1.9% in 2026. All major regions will exhibit moderate production increases, though growth rates will diverge.

Regionally, North America's chemical output is projected to grow by 0.5% in 2026. Within this region, the United States will decelerate from 0.7% in 2025 to 0.3%, with overall industrial production growth falling from 1.1% to 0.6%. Nevertheless, the chemical sector demonstrates resilience, and the North American chemical market is expected to recover by mid-2026. Europe's chemical industry will reverse its downturn, shifting from a 1.2% contraction in 2025 to a modest 0.2% growth in 2026. Nevertheless, core challenges remain: insufficient competitiveness and stringent regulatory pressures. Compounded by the Eurozone GDP growth rate declining from 1.5% to 1.1%, high energy prices and intensified export competition pose long-term headwinds. Only Germany's fiscal stimulus and increased infrastructure spending offer limited positive impacts. In the Asia-Pacific region, India may emerge as a regional bright spot. With India's GDP growth projected to reach 6.4% in 2026, driven by dual growth in industrial and consumer demand, petrochemical demand will surge strongly. India's chemical industry will increase investment in specialty chemicals capacity to reduce import dependency. Chemical production growth in Africa and the Middle East will accelerate, rising from 2.3% in 2025 to 3.8%, making it the fastest-growing region.

Across segments, global chemical sub-industries will show moderate divergence in 2026, with production growth or declines not exceeding 2%. U.S. basic chemicals production growth will rise from 0.1% to 1.2%, while specialty chemicals production will shift from 4.3% growth to a slight 0.2% decline, primarily due to persistent weakness in downstream applications. The downstream chemical market shows structural improvement, with 12 out of 20 sectors tracked by ACC expected to grow and 8 to contract—an improvement over the 9 growth and 11 contraction seen in 2025. The artificial intelligence boom is driving the semiconductor and electronic components market as the primary growth engine. Output is projected to increase by 11.9% in 2025 and a further 6.5% in 2026, boosting demand for chemical products such as semiconductor materials and high-end cooling materials.

On the policy and risk front, while global trade policy uncertainty remains above historical averages, it has shown a downward trend in recent months. Framework trade agreements between the U.S. and major trading partners are expected to drive a rebound in global trade volume in the third quarter of 2025. However, risks persist: a deteriorating U.S. labor market and declining confidence in debt sustainability could push up long-term interest rates, leaving recession risks unresolved; Geopolitical uncertainties have intensified, with U.S. sanctions against Venezuela sparking market concerns.

Regarding industry cycle assessments, S&P Global Ratings expert Thomas Waters noted that supply excess and weak demand have stifled global chemical industry growth. Although the sector has bottomed out, revenue is unlikely to see significant improvement, with market demand potentially remaining flat or declining in 2026. David Jankowicz, Deloitte's industry leader, stated that chemical companies have implemented multiple countermeasures. However, until demand recovers or capacity adjustments restore supply-demand equilibrium, future market trends remain uncertain. The timeline and path for the industry's return to robust growth remain unclear.

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