The chemical industry is gaining momentum after being stuck in a rut for a spell. The industry’s upturn is backed by improved macroeconomic conditions and a revival of demand across major chemical end-use markets.
The chemical industry reeled under the effects of the coronavirus pandemic during the first half of 2020. The pandemic put brakes on industrial activities globally, squeezing demand for chemicals across key end-markets. Nevertheless, an economic rebound in China, a top consumer of chemicals, and a return of economic activities across the world augur well for the industry for the remainder of 2020.
With the easing of restrictions on business activities globally, demand for chemicals has recovered of late across major end-use industries such as construction and automotive. The global economy is gradually pulling out of its coronavirus-induced slumber as businesses reopen following lockdowns and restrictions. Moreover, recent positive manufacturing data from the United States, Eurozone and China indicates that the global manufacturing recovery remains on track.
Economic activities in China are picking up speed as the country continues its recovery from the pandemic-led slowdown. Notably, the recovery in the country’s manufacturing gathered momentum in September on government stimulus to boost consumption and strong growth in new export orders driven by a rebound in overseas demand. China’s official manufacturing purchasing managers’ index (“PMI”) expanded to 51.5 in September from 51 in August, per National Bureau of Statistics. A reading above 50 indicates expansion in activity.
Moreover, the U.S. manufacturing sector kept the momentum going in September although activities rose at a slightly slower pace than that of August. According to the Institute for Supply Management (“ISM”), the U.S. Manufacturing PMI clocked 55.4% in September compared with 56% in August. The September figure indicates an expansion in the overall economy for the fifth straight month following a contraction