Chemical Distribution Market Size, Share & Trends Analysis Report By Product (Specialty Chemicals, Commodity Chemicals), By Applications (Automotive and Transport, Agriculture, Construction, Consumer Goods, Industrial Manufacturing, Textiles, Pharmaceuticals, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global chemical distribution market size was valued at USD 246.49 billion in 2022. It is estimated to reach USD 449.36 billion by 2031, growing at a CAGR of 6.3% during the forecast period (2023–2031). The incorporation of e-commerce in the distribution of chemicals is anticipated to accelerate the use of chemicals by industries in the production of various goods.

Chemical distribution is obtaining, storing, moving, and delivering chemicals to final consumers across numerous sectors. It involves acting as a go-between for chemical producers and clients, serving as a crucial link in the supply chain. Chemical distributors are essential to the effective and dependable delivery of chemicals while satisfying various consumer needs. Chemical distributors deal with various chemicals, including industrial gases, specialty chemicals, and common chemicals. They manage stocks, warehouses, and logistics to ensure that products are delivered to clients on schedule.

Additionally, they offer value-added services, including technical support, help with blending and formulation, and regulatory compliance support. Global manufacturers and consumers are linked via the chemical distribution sector as a bridge. While guaranteeing that clients have access to a broad range of chemicals, customized solutions, and technical know-how, manufacturers can concentrate on production. Chemical distribution enables the efficient flow of chemicals, supporting sectors including construction, agriculture, automotive, pharmaceuticals, and many others that depend on these vital materials for their operations.

Market Dynamics

Market Drivers

Increasing Penetration of Online Retail Platforms

Digital platforms have made it easier for end-users to purchase chemicals despite the challenges posed by a complex supply chain and the absence of a legitimate marketplace for chemical distributors. Digital platforms unite distributors, manufacturers, and consumers of chemicals to provide suitable solutions. This action has enabled many small, medium, and large businesses to expand internationally. Technology has evolved significantly over the past two decades, and the incorporation of e-commerce in the distribution of chemicals is anticipated to accelerate the use of chemicals by industries in the production of various goods.

Additionally, incorporating digital technology enables chemical distributors to offer a broader selection of products and increase their market share. As the industry increasingly adopts this trend, transparency and connectivity along the entire value chain, including pharmaceutical ingredients, CASE, personal care, and construction chemicals, will increase. Experts also believe the third-party chemical distribution model will increase value, enhance efficiency, and foster relationships between distributors and consumers.

Increasing Sales for Pharmaceuticals and Personal Care Chemicals Sales

The demand for chemicals is increasing steadily due to the rising consumption of pharmaceuticals and personal care items. The demand for personal care products is increasing due to rising disposable income, product innovation, and market saturation. In the production of personal care products such as soaps, toothpaste, fragrances, shampoos, hair dyes, lipsticks, and moisturizing lotions, numerous compounds, including formaldehyde, lanolin, ammonium lauryl sulfate, diethylene glycol, salicylic acid, malic acid, and lactic acid are used.

In developed regions, companies in the personal care industry are concentrating on maximizing product visibility through online promotional activities, sweepstakes, and other initiatives, thereby increasing the demand for these products. Men are becoming more aware of the importance of maintaining healthy skin and hair, increasing demand for male hygiene products. The combination of these factors is anticipated to accelerate the development of the chemical industry, thereby increasing the demand for chemical distributors to provide the necessary raw materials. Thus, serves to expand the market for chemical distribution.

Market Restraint

Fluctuations In Raw Materials Price Leads to Unstable Price of The Chemical and Effect Operations of Chemicals Distribution

The fluctuation in raw materials and feedstock prices is one of the most significant challenges the chemical industry must overcome. The profitability of chemical firms needs to acquire the appropriate raw materials for producing a chemical at the appropriate location and price while simultaneously satisfying all of the necessary safety and regulatory criteria. The fluctuation in prices of raw materials has a direct and immediate impact on the profit margins of chemical makers and distributors, regardless of whether the chemicals in question are considered commodity or specialty chemicals. Currency exchange rates are an important factor in the market's overall regulation.

Market Opportunities

Increasing Interest in Specialty Chemicals

Chemical distributors are in a position to capitalize on significant opportunities made available to them as a direct result of the growing demand for specialty chemicals in various industries. The medicines industry, the industry for personal care products, and the automotive industry are all included in this category of businesses. Opportunities in the corporate sector provide a means to investigate these conceivable outcomes.

Chemical distributors are useful partners in acquiring and supplying specialized chemicals because of the high level of experience and technical knowledge required to work with these types of chemicals. This is because chemical distributors must work with these compounds daily to do their jobs. Working with these compounds requires a large amount of hands-on experience and in-depth technical expertise because of this. The reason for this is that working with these compounds asks for both.

Regional Analysis

North America Dominates the Global Market

Based on region, the global chemical distribution market is bifurcated into North America, Europe, Asia-Pacific, Central and South America, and the Middle East and Africa.

North America is the most significant global chemical distribution market shareholder and is estimated to exhibit a CAGR of 3.4% over the forecast period. Chemicals are being used in various end-user sectors, including pharmaceuticals, consumer products, textiles, and automotive and transportation, which will likely drive up demand for them in the North American market throughout the forecast period. Specialty chemicals are used in the pharmaceutical sector to produce Active Pharmaceutical Ingredients (API), package pharmaceutical goods, and sterilize medical equipment before and after use. The region's demand for pharmaceutical products is driven by an aging population and increased non-communicable diseases like diabetes, cancer, and non-small cell lung disease. The COVID-19 pandemic is also exacerbating these factors. As a result, the market for chemical distributors is likely to rise during the forecast period due to the increasing demand for chemicals due to the growing demand for pharmaceutical products.

Asia-Pacific is anticipated to exhibit a CAGR of 6.4% over the forecast period. Due to an expansion in China's and India's capacity for chemical manufacture, the Asia Pacific area has overtaken the U.S. and Western Europe as the market's two largest exporters. Low-cost labor, land, and resources are easily accessible in the area. Throughout the forecast period, the distribution of chemicals is anticipated to develop due to the expanding use of chemicals in end-user industries, particularly in emerging economies like India, China, Vietnam, Japan, South Korea, Taiwan, Indonesia, and Thailand. The market is anticipated to be positively impacted by numerous manufacturing sectors, including textiles, electrical and electronics, automotive and transportation, food and beverages, and consumer goods, among others, as well as government initiatives to support the chemical industry in the APAC region. Chemicals are employed in numerous sectors to make a wide range of products.

In Europe, the chemical industry produces petrochemicals, fundamental inorganics, specialized chemicals, and consumer chemicals. There is a good chance that the growing demand for lubricants in car vehicles and manufacturing equipment will contribute to the demand for chemicals, which will benefit the expansion of the market for chemical distribution. They may move their production plants to emerging economies because pharmaceutical manufacturing businesses increasingly focus on emerging markets. This may, in turn, hinder the expansion of the chemical market and the distribution of chemicals in the region.

In Central and South America, Sectors like food and beverage, construction, and mining primarily support the economies. Due to changing lifestyles and positive regulatory advancements, the need for chemicals in food and beverage products is likely to increase, which will increase the need for chemical distributors to supply the food and beverage industry with the necessary raw materials. The presence of middle- and high-income customers is expanding, and there is consistent economic growth in nations like Argentina, Brazil, Peru, and Chile, among others, all of which are helping to fuel the expansion of this region's food and beverage sector.

In the Middle East and Africa, the chemical distribution market is expected to grow due to the increasing demand for chemicals in end-use industries. Government initiatives and investment by chemical companies are expected to provide opportunities for market penetration. The region's abundant raw materials, strategic location, and developed infrastructure are expected to support market growth. Africa is a promising market for chemical distribution due to its abundant raw materials and rising demand for end-use products. However, complex demographics, political volatility, unpredictable energy supply, and weak infrastructure pose challenges for the growth of the chemical distributor market in the region.

Segmental Analysis

The global chemical distribution market is bifurcated into products and applications.

The global chemical distribution market is bifurcated based on the product into specialty and commodity chemicals. 

The specialty chemicals segment dominates the global market and is predicted to exhibit a CAGR of 5.9% during the forecast period. Performance chemicals are another name for specialty chemicals. This is because performance chemicals tend to improve the performance of both the production process and the final goods. Adhesives, coatings, cosmetic chemicals, petrochemical process catalysts, sealants, specialty paper chemicals, packaging chemicals, textile chemicals (acetic acid, formic acid, caustic soda), surfactants, industrial chemicals (sulfuric acid, ethylene, sodium hydroxide, nitrogen), food additives, water-soluble polymers, engineering thermoplastics, construction chemicals, and specialty oilfield chemicals are all examples of specialty chemicals. Functional products, such as antioxidants, adhesives, and sealants, are examples of specialty chemicals. On the other hand, market-oriented products, such as those utilized in particular industries, such as oilfields and electronic chemicals, are market-oriented.

Based on application, the global chemical distribution market is bifurcated into automotive and transport, agriculture, construction, consumer goods, industrial manufacturing, textiles, pharmaceuticals, and others. 

The construction segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 5.7% over the forecast period. Specialty chemicals used in the construction industry, including fluorinated compounds, phthalates, polybrominated diphenyl ether, and short-chain chlorinated paraffin, help give building materials distinctive properties. These chemicals also make precast concrete, concrete admixtures, cement processing additives, and other products. Chemicals are used in the building industry to improve structural strength, durability, and appearance and serve other purposes, including fire and water leak protection. Chemicals are also employed to improve a building's aesthetic appeal. The global increase in building activity directly impacts the demand for specialized chemicals in construction applications. Global demand for building and infrastructure development has increased due to rapidly expanding urbanization, rising population, and industrial growth.

Recent Developments

• May 2023 - Brenntag leads the 2023 ICIS Top 100 Chemical Distributors ranking.
• January 2023- Azelis and Sun Chemical extended their distribution partnership to France and Benelux for the industrial chemicals market.