Materials and Chemicals Industry Outlook for Q4 2023: Collaborations, Innovations, and Product Launches Gaining Momentum

Mergers and Acquisitions: Fueling the Expansion of the Industry

• On 8th December 2023, LyondellBasell (LYB) revealed its decision to sell its EO&D (Ethylene Oxide & Derivatives) business with the corresponding production facility situated in Bayport, Texas. The agreement for this transaction was made with INEOS (INEOS Oxide). The transaction's completion is expected in the second quarter of 2024, contingent on the conclusion of planned facility maintenance and subject to regulatory approvals and other standard closing conditions. King & Spalding served as legal counsel to LyondellBasell, and J.P. Morgan provided financial advisory services for this agreement.
• On 2nd October 2023, Solenis, a prominent global producer of speciality chemicals catering to water-intensive industries, completed the acquisition of CedarChem LLC. In this transaction, Solenis will obtain all operating assets of CedarChem. The acquisition is aligned with Solenis' direct go-to-market strategy, aiming to enhance its provision of improved chemical and wastewater treatment products and services to customers. As per analysis, the global speciality chemicals market is expected to generate $953.9 billion by 2027.

Partnerships and Innovations: Boosting Brand Impact

• Sumitomo Chemical successfully constructed a pilot facility at its Ehime Works in Niihama City, Ehime Prefecture, Japan on 12th December 2023. The facility is dedicated to establishing a highly efficient process for methanol production from CO2. Operations at the facility have commenced, with support from NEDO's (*1) Green Innovation (GI) Fund. The company's objectives include completing the technology demonstration by 2028, initiating commercial production through the new process, and licensing the technology to other companies in the 2030s.
• On 27th November, Kemira, a prominent global provider of sustainable chemical solutions for water-intensive industries, disclosed a substantial expansion in the production capacity of its ferric sulfate water treatment chemicals manufacturing unit in Goole, UK. The investment of an extra 70,000 tons of capacity is designed to address the increasing need for coagulants, driven by the newly stringent regulations of Asset Management Plans 7 and 8. These regulations specifically target phosphorus and other nutrient emission from wastewater treatment, as stated in the Water Industry National Environment Program in the UK. The market analysis states that the global water treatment chemicals market is anticipated to hold $53.8 billion by 2032.
• Anglo-American officially announced the signing of a memorandum of understanding with Mitsubishi Materials Corporation on 11th October 2023. This collaboration plans to jointly develop a copper product offering that addresses the increasing demand for metals with robust and verifiable provenance credentials. The collaborative effort will concentrate on traceability enhancement throughout the fragmented value chain of copper. According to industry analysis, the global copper chemicals market is estimated to display a notable CAGR of 4.5% by 2030.

Product and Service Launches Assisting Frontrunners in Updating Product Portfolio

• Rio Tinto is looking to enhance the production capacity of its latest iron ore mine at Gudai-Darri, up to 50 million tons per year. This expansion is projected to cost approximately $70 million (A$130 million) and will be achieved through incremental productivity improvements. The Gudai-Darri mine, based in the Pilbara region of Western Australia and representing a total investment of $3.1 billion, has already begun with the production. It obtained its planned capacity of 43 million tons in less than 12 months after the extraction of the first ore.

Technological Advancements and Other Developments Propelling the Growth of Top Entities

• BASF has achieved a significant milestone by becoming the first company to successfully produce metal-organic frameworks (MOFs) on a commercial scale for carbon capture. The design of this structure enables a significant capacity for storing carbon dioxide (CO2), dehumidifying air for room climate control, and adsorbing the greenhouse gas methane. BASF has acquired expertise in scaling up and producing metal-organic frameworks (MOFs), allowing for the customization of MOFs to meet specific needs and customer specifications. BASF can now make personalized MOFs for a range of applications and industries. The global metal-organic frameworks market is estimated to witness substantial growth in the future.
• The DGTR (Directorate General of Trade Remedies) has initiated several anti-dumping duty investigations from 2nd October 2023 into chemical imports from China. This action is a response to an observed increase in dumping, where imported goods are sold at prices lower than their fair market value, potentially causing harm to domestic industries.

Promising future of the materials and chemicals sector

The analysis conducted by Allied Market Research on the outlook of the materials and chemicals industry for Q4 2023 highlights a clear trend within the sector towards embracing innovation, sustainability, and collaboration. Mergers, acquisitions, technological innovations, and sustainable initiatives are collectively shaping the future landscape of the construction industry. These transformative developments underscore the sector's dedication to embracing sustainable practices and improving efficiency and resilience. For more insights into the materials and chemicals industry, contact our experts today!