I. Macro Landscape: Weak Recovery, Strong Divergence, and Supply Chain Reconfiguration

Global economic conditions in 2025 were characterized by slow recovery, high cost pressures, and accelerated regionalization of supply chains, shaping the chemicals and materials industry in several structural ways:

1. Diverging Demand Patterns

• Consumer downstream sectors remained soft, weighing on plastics and basic chemicals.

• Technology-driven sectors grew counter-cyclically, including semiconductor chemicals, battery materials, and high-purity electronics chemicals.

The industry entered a phase of “weak macro cycle + strong technology cycle.”

2. Shifts in Cost Structures

• Crude oil prices fluctuated widely at elevated levels, pressuring feedstock-dependent chains.

• Energy prices remained persistently high in Europe and parts of the OECD, prompting capacity rationalization and delayed expansions.

3. Supply Chain Regionalization Accelerates

• U.S.: strengthened localization requirements for critical minerals, battery materials, and semiconductor materials.

• Europe: tightened green compliance, carbon costs, and PFAS restrictions drove costs up and capacity outward.

• Asia (China, Southeast Asia, India): emerged as the center of global capacity additions.

II. Ten Structural Shifts in the Global Chemicals Industry in 2025

1. Semiconductor Chemicals Became One of the Fastest-Growing Segments

Growth drivers:

• Continued global semiconductor capacity expansion (U.S., Japan, Korea, Taiwan, EU)

• Advanced nodes (5/3 nm, HBM) demanding ultra-pure chemicals

• Localization pressures tied to national security and supply chain resilience

Strongest-growing categories:

• High-purity sulfuric acid / HF / NH₃

• Photoresists & precursors

• CMP materials

• Ultra-pure solvents & electronic gases

2025 marked a shift from globalized supply → regionalized ecosystems.

2. Battery Materials Transitioned from “Price Bottoming” to “Selective Rebound”

H1: lithium, nickel, cobalt remained subdued

H2: signs of structural recovery

Demand divergence intensified:

• LFP continued gaining global share

• High-nickel cathodes improved with premium EV and storage demand

• Silicon anodes & solid-state electrolytes moved toward commercialization

2025 pattern:“Low-price consolidation → selective rebound → accelerated tech upgrade.”

3. Petrochemical Chains Enter a Global Rebalancing Cycle

Key features:

• Excess ethylene and propylene capacity

• Global rationalization of inefficient assets

• Increased Middle Eastern export pressure

• High-cost Asian countries saw closures

Large volumes of:

• PTA / MEG / aromatics asset sales

• Divestment of non-strategic downstream polymers

• Shifts in trade flows

4. Polyurethanes (MDI/TDI/Polyether Polyols): Weak Equilibrium

2025 characteristics:

• Real estate & furniture demand remained weak

• PO and polyether polyols oversupplied

• Several planned expansions delayed

Structural bright spots:

• CASE (Coatings, Adhesives, Sealants, Elastomers) stable

• Specialty isocyanates (HDI, IPDI) grew strongly

• Infrastructure & industrial demand remained resilient

5. High-Performance Materials Saw a Late-Year Restocking Cycle

Segments entering recovery:

• Wind power composites (offshore wind in China and U.S.)

• Automotive lightweight materials (carbon fiber & reinforced plastics)

• Aerospace demand improving, driving epoxy resins & engineering plastics

6. Bio-based & Biodegradable Materials: Fast Growth, Persistent Pressure

PLA, PBS, PHA expanded steadily, yet faced:

• Higher cost versus conventional materials

• Uneven policy adoption across regions

• Lack of unified global demand scale

2025 was “continued investment but slower pace.”

7. PFAS Regulation Reached a Global Inflection Point

Key 2025 markers:

• EU accelerating bans

• U.S. states intensifying litigation

• Industry speeding up PFAS-free material development

PFAS-replacement materials (high-performance resins) expected to scale 2026–2028.

8. ESG and Carbon Costs Became Europe’s Biggest Industry Pressure

2025 themes:

• High energy costs

• High carbon fees

• High regulatory burden

Leading to:

• Layoffs

• Plant closures

• Stronger push to invest outside Europe

Europe’s role in basic chemicals continued to weaken.

9. M&A & Partnerships Accelerated: From “Scale Expansion” to “Tech Reinforcement”

Three major themes:

(1) Acquiring semiconductor chemical companies

To secure technology and customer stickiness.

(2) Exiting basic chemical assets

PTA, MEG, base polymers, and non-differentiated aromatics.

(3) Entering battery materials

Especially anode players, electrolyte additive startups, and recyclers.

10. AI Penetrated the Entire Value Chain

2025 was the year AI moved from pilots to full-scale deployment.

Key applications:

• R&D: molecular modeling, materials simulation

• Procurement: intelligent sourcing, supplier alternatives, price forecasting

• Operations: predictive maintenance, energy optimization

• Market intelligence: automated scanning & analysis

• Sales: automated lead generation and qualification

III. Regional Overview (Comprehensive Edition)

1. China (Asia’s Largest Chemicals Base)

2025 characteristics:

• Strong investment in semiconductor and advanced electronic chemicals

• Structural oversupply in upstream petrochemicals

• Continued strength in intermediates and specialties

• Maintained global leadership in battery materials

China is positioned to increase its share in high-complexity chemicals by 2030.

2. North America (Policy-Driven Localization)

2025:

• IRA boosted battery materials localization

• Semiconductor capacity entering ramp-up

• Petrochemical cost advantage continued

The U.S. aims to build an integrated Energy + Semiconductor + Battery materials platform.

3. Europe (High Cost, High Regulation, Strategic Decline in Basic Chemicals)

2025:

• Workforce reductions

• Shutdown of high-energy assets

• Shift toward specialty and life-science-oriented chemistries

• Capital outflow to NA & Southeast Asia

Europe’s foundational chemical competitiveness weakened further.

4. Middle East (Cost Advantage, Strategic Adjustment)

2025:

• Expanding downstream derivatives

• Deepened strategic ties with Asian importers

• Strong export orientation

5. Southeast Asia (Emerging Secondary Supply Chain Hub)

2025:

• Malaysia, Vietnam, Indonesia attracted major foreign chemical investments

• Competitive labor and logistics

• Becoming a key regionalization node

IV. 2026 Outlook: Systematic Forecast

1. Demand: Broadly Weak Recovery, Strong Growth in Key Segments

• Semiconductor chemicals:high growth

• Battery materials: medium growth

• Petrochemicals:Minimal growth

• Bio-materials:low growth

2. Supply-Demand: Global “De-Capacity Cycle” Begins (2026–2028)

Triggered by:

• European closures

• Rationalization in Japan & Korea

• Asset consolidation in APAC

Trade flows likely shift from Middle East/China → Asia/Africa & smaller emerging markets.

3. Technology: Five High-Growth Material Pathways

(1) Solid-state battery materials (sulfides, oxides)

(2) Semiconductor precursors & EUV-related chemicals

(3) High-performance engineering plastics (PPS, PEEK, LCP)

(4) PFAS-free alternatives

(5) Chemical recycling & solvent recovery technologies

4. Cost: Energy Structure Determines Global Competitiveness

• Europe → structurally disadvantaged

• Asia → diversified supply → remains competitive

• Middle East → lowest-cost exporter