Table Of Contents
Yerukola Eswara Prasad
Pooja Parvatkar
The Materials and Chemicals Industry in 2024: Adapting to the Winds of Change
The materials and chemicals industry has entered 2024 on a positive note. Before analyzing what 2024 holds for the industry, it is important to study the current state of the industry and what impact 2023 had on the sector. This will help in understanding which growth drivers are likely to continue to influence the industry, which new opportunities are likely to crop up, and what challenges the industry might face in the upcoming year. Allied Market Research has come up with a comprehensive industry brief that covers the different aspects of this domain. The industry brief throws light on trends and anticipations, market restraints, technological advancements, and sustainability initiatives in this domain. The main motive behind providing such a detailed industry brief is to help businesses understand the intricacies of this dynamic sector and offer actionable data to easily tackle any challenge.
2023: A fruitful year with positive prospects
The materials and chemicals industry witnessed huge growth in the year 2023. In fact, 2023 was one of the best years of this decade for the industry. Various factors and conscious stakeholder actions play a major role in taking the industry to a higher pedestal. Many companies in the industry invested heavily in R&D activities and technological advancements. These investments had a multiplier effect on the growth rate of the industry, thereby helping the sector to overcome the challenges and hurdles it faced in the past year. The momentum gained by the materials and chemicals industry will surely help it to register huge growth in the coming period.
Trends and anticipations for 2024
Innovative Materials
Though all these years the materials and chemical industry experienced growth, on the innovation front the industry was a bit stagnant. Whatever innovation the industry experienced was related to bettering the manufacturing processes. However, in the past few years, research institutions, engineering universities, and private companies across the globe have focused their energies into developing materials that will completely change the face of this industry. The hard work put in by these stakeholders has borne fruits as certain innovative materials have been designed which are set to rule the industry in the coming period. Graphene, fullerenes, carbon nanotubes, etc., are some examples of innovative materials that are slowly replacing traditional materials. For instance, a study on material science has shown that graphene has potential applicability in around 60 industries including consumer electronics, energy storage, medicine and healthcare, food and beverage, sports equipment, etc. Similarly, fullerenes have shown utility in advanced sciences such as tissue engineering. Innovative materials have, thus, prepared ground for future technological advancements and will go a long way in revolutionizing almost every sector.
Bioeconomy and renewable feedstocks
The materials and chemicals industry has been subjected to harshest criticism, and rightly so, for being one of the highest polluting industries in the global economy. To change its course to a more environmentally sustainable nature, private companies have started investing in raw materials that are eco-friendly and have minimal impact on the environment. Moreover, governments across the globe have passed laws banning the use of certain substances as raw materials for chemical manufacturing. As a result, many synthetic raw materials are being replaced by renewable feedstocks for manufacturing different types of chemicals. Also, in order to promote chemicals manufactured from renewable feedstocks, many countries are subsidizing and offering concessions to such chemicals.
Just as the supply-side stakeholders have changed their course, demand-side stakeholders, i.e., consumers have also played a huge role in reducing the carbon footprint of this industry. Materials such as bioplastics are in huge demand from agriculture and allied industries. Farmers across the globe are increasingly using organic fertilizers instead of chemical fertilizers. Moreover, consumers are opting for packaged foods having biodegradable packaging which has compelled food packaging industries to shift to bioplastics. All these factors have resulted in a steady shift towards bioeconomy, that seeks to strike a balance between environmental sustainability and economic development.
Possible challenges the industry might face in 2024
As with any sector of the economy, the materials and chemicals industry might face certain challenges and hurdles that will restrict its growth in the upcoming year. The volatility of raw material prices is one of the biggest hurdles for the domain as it will hamper a steady supply of chemicals. This can have a domino effect on the output of other industries which use these chemicals as raw materials. There are numerous reasons why the prices of raw materials are fluctuating. Geopolitical tensions, with numerous conflicts flaring up across the world, have led to weaponization of supply chains. The conflict in the Middle East has especially led to a rise in crude oil prices. The fluctuations in the crude oil market might disrupt the entire manufacturing cost of chemicals. Apart from this, stringent laws put in place by various governments regulating the use of certain substances for manufacturing of materials has led to many businesses facing operational issues.
Technological advancements and sustainability initiatives to look out for in 2024
Green Chemistry
Green chemistry basically refers to manufacturing of materials and chemicals with the help of processes that minimize or avoid the use and generation of hazardous and toxic substances. The shift towards green chemistry is a result of the growing concerns related to global warming and climate change. Green chemistry is based on certain principles which include maximum raw material usage, atom economy, production of safe chemicals, striving for energy efficiency, use of renewable feedstocks, analysis for pollution prevention, and chemical accident prevention. These principles collectively aim to bring down the carbon footprint of the materials and chemicals industry and make it more sustainable.
Integration of AI and IoT in chemical manufacturing
Artificial intelligence has penetrated almost all sectors of the economy; the materials and chemicals industry is no exception to this trend. Integration of AI has been helpful in enhancing process efficiency and product quality. For instance, AI has played a vital role in improving the capabilities of computational chemistry and has helped in the development of chemicals by studying the compounds at their atomic and subatomic levels. Further, Internet of Things has augmented the process of automation and aided in predictive maintenance, supply chain optimization, and data analytics. Naturally, a growth in the IoT market is expected to strengthen the materials and chemicals industry also.
Nanotechnology
Nanotechnology refers to manipulation of materials and matter at an atomic or sub-atomic level for developing new materials and structures. Nanotechnology has been instrumental in opening up new opportunities in the consumer electronics industry and the field of biotechnology. Similarly, it has led to the development of new materials and chemicals which are cost-efficient in nature. Moreover, nanotechnology has helped in maximizing raw material usage, thereby improving product efficiency and reducing wastage.
2024: A Year Full of Exciting Opportunities
The trends, anticipations, technological advancements, and sustainability initiatives all point to one thing- the materials and chemicals industry is sure to witness massive growth in the upcoming year. Though there are certain challenges and restraints, the companies and businesses operating in this industry have already started to align their operations as per these trends. This will minimize the effect of these challenges and help the players to fully capitalize on the opportunities offered by the industry.
