COVID-19 Outbreak Impact on Chemicals & Materials Market

Market Synopsis

With the outbreak of COVID-19 and the escalating numbers of infected, city-wide lockdowns and transport network breakdowns are impacting the world indiscriminately and affecting the global economy. The impact on chemicals & materials supply chains, and manufacturing operations across the world are expected to be significantly felt in the days and weeks to come.

The lockdown of cities and countries have brought transportation to a halt. There are thousands of chemical companies that have temporarily shut down or are on the verge of shutting down. The most impacted companies are those heavily dependent on factories in China for raw materials, parts, or finished goods.

In the last few years, to reduce the cost of manufacturing, several companies have implemented supply chain strategies such as lean manufacturing, outsourcing, and offshore production. However, the spread of COVID-19 has resulted in severe disruptions in global supply chains.

Overview of Chemicals & Materials Companies during COVID-19

Current and Post Impact analysis

The unpredictable situation has caused a crisis in the global economy. Several companies have been forced to shut down their production units. The indiscriminate spread of COVID-19 is already impacting the port traffic globally.

Between January and February 2020, China’s overall exports reduced by 17.2% and imports fell by 4% in terms of value (USD). The country also posted a trade deficit of USD 7.1 billion in the first two months of the same year.

MRFR estimates that COVID-19 will have a significant effect on the manufacturing industries, such as steel, chemicals, agrochemical, textile, paper, and automobile, worldwide for the next five to six months.

Market Drivers

• High demand for protective fabrics and disinfectant chemicals to fight against COVID-19

• Sustainable demand for antimicrobial additives to stop the growth of microbes

• Demand for plastics and glass for manufacturing PPE

Market Challenges

• Economic slowdown of most countries

• Most of the players are facing heavy losses and temporarily shutdown

• Disruptions of supply chains

• Under pressure petrochemical prices

Market Opportunity

• High demand for textile fabrics for health and hygiene measures

• New entrants and existing players are focusing on bulk production of chemicals for sanitizers

Segmentation

BY Type

• Basic Chemicals


• Specialty Chemicals


• Polymers & Plastics


• Material & Advanced Materials


• Renewable Chemicals


• Metals & Alloys

By Region

• North America


• Europe


• Asia-Pacific


• Latin America


• Middle East & Africa

Regional Analysis

The alarming increase in the COVID-19 cases around the whole world has slowed down day to day life. Each country is concentrating on finding a cure for this novel virus. The US has become an epicenter of this pandemic as the number of cases in the country is growing rapidly.

According to the American Chemistry Council (ACC), the chemical industry must maintain the operations to supply disinfectant and antimicrobial plastics for packaging. Many European chemical manufacturers are facing operational difficulties, especially in countries where there are several positive cases such as Italy, Germany, France, Spain, and the UK. The Germany Industry Association stated that the chemical industry’s marginal growth is expected to witness a 1.5% decline in 2020.

The early stage of COVID-19 was initially identified in China from where it spread across the world. Companies such as LG Chem and Eastman Chemical have stopped their production in China. Some of the disinfectant producers come up with expansion plans to fight against COVID-19. For instance, Lanxess announced that it would increase the production of disinfectant RelyOn Virkon. However, other facilities of Lanxess were closed in China.