New Delhi [India], June 9 (ANI): Recently released annual reports of several global chemical companies expect stress to continue in the chemical sector in 2025.

According to a report by PL Capital, Global chemical industry growth (excluding pharmaceuticals) is expected to slow to 3 per cent in 2025, down from 3.9 per cent in 2024.

Growth in China is also expected to decline to 4.2 per cent in 2025 from 6.8 per cent in 2024, though it is likely to remain ahead of other regions. China contributes 86 per cent of the global chemical production.

Outlook commentaries by leading companies also point to several headwinds facing the industry in 2025. High tariffs are expected to disrupt prices, supply chains, and overall market stability.

The crop protection segment, which was already impacted in 2024, is expected to perform poorly again due to weak demand and increased competition.

Moreover, a rise in the supply of generic products is putting further pressure on pricing. In response to uncertain market conditions, customers in many countries are choosing to maintain lower inventory levels than in the past.

The drop in commodity prices has also added to the industry's challenges. In 2022 and 2023, the prices of corn and soyabean--the two major crops in the US--rose significantly by 21 per cent and 11 per cent respectively, boosting chemical prices and earnings. However, in 2024, prices fell sharply--corn by 33 per cent and soyabean by 23 per cent.

Though there was a slight recovery in early 2025, prices are still below last year's levels. This has led to lower farm incomes and reduced spending on agrochemicals such as fertilizers and pesticides, which in turn is likely to limit demand recovery in 2025.

Major global chemical companies have echoed concerns over weak farm income and sluggish recovery prospects. Syngenta noted in its 2024 annual report that farmers' income remains under pressure.

Given the muted demand environment and ongoing pricing challenges, the sector continues to face headwinds. However, amid this cautious backdrop, companies stand out due to their lower dependence on agrochemicals and relatively stronger market positions. (ANI)