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Asia Pacific: Leading The Recovery of the Global Construction Chemicals Market
Asia Pacific: Leading The Recovery of the Global Construction Chemicals Market
From the perspective of many market participants, if the situation of the COVID-19 epidemic does not deteriorate, 2021 will be the year of recovery for the construction chemical industry. In the tide of the recovery of the world’s chemical industry, the Asia-Pacific region will be the leader. According to the prediction of the US Chemical Industry Council (ACC), global chemical production will resume its growth in 2021, and the growth of Asian construction chemical production led by China will be the strongest. In addition to China, India will also be another essential development market, while markets in other Asia-Pacific regions such as Japan and South Korea remain to be seen.
China leads the growth of the Asia-Pacific market
ACC estimates that global construction chemical production is expected to rebound by 3.9% in 2021 after experiencing the most significant drop of 2.6% in 40 years in 2020. Among them, China’s leading role is the most important. As early as the second half of 2020, China has become a leader in the global construction and chemical industry growth. ACC chief economist Kevin Swift said: “China is the first country to emerge from economic recession. By September 2020, China’s economy has fully recovered and entered the economic cycle’s expansion phase. “In 2020, the overall production of chemical products in the Asia-Pacific region fell by 2.1%, the lowest rate of decline in all regions in the world.
ACC predicts that in 2021, China-led Asia sees strong growth prospects for the production of construction chemicals. ICIS analysts pointed out that as China encourages workers not to return to their hometowns for the New Year in 2021, after the Lunar New Year in 2021, the Asia-Pacific chemical market led by China will also recover at a faster rate than in previous years. The Asia-Pacific region as a whole is expected to grow by 4.4%, North America will grow by 4.1%, Latin America will increase by 4.6%, and Europe will grow by 3.1%.
India has already become an important growth market
Compared with China, India’s new crown pneumonia epidemic situation is more severe. However, in the recent period, the number of newly confirmed cases in India has gradually decreased, and the amount of vaccination has increased rapidly, laying the foundation for India’s economic recovery in 2021. In the fiscal year ending March 31, 2021, India’s GDP is expected to plummet by 9.8%, but the country predicts that India’s GDP will rebound by 8.9% in the next fiscal year.
Utopal Sheath, executive director of IHS Markit’s polyolefin business, said that with the gradual lifting of the epidemic-related lockdown measures, the demand for construction chemicals in India would fully recover. The Indian construction and chemical industry has been at the forefront of the rebound. Considering the economic recovery, the government’s several policies to support the manufacturing industry, and the renewed confidence of foreign investors in the Indian economy, 2021 should be a year of vigorous development of India’s construction and chemical industry.
ACC predicts that the output of construction chemicals in India will increase by 7.5% in 2021, ranking among the top of the world’s major economies, and will rebound strongly from a decline of 6.1% in 2020. IHS Markit predicts that, considering that crude oil prices remain below US$60/barrel for most of 2020, Indian and Chemical producers will continue to maintain high-load operations in 2021. In addition, the COVID-19 epidemic and changing supply chains are forcing many industries to re-examine their product sourcing strategies. Some Western companies are implementing their supply chain diversification strategy, which is suitable for Indian manufacturing and will gain growth momentum in 2021.
Slow economic recovery in Japan and South Korea
Compared with the booming China and India, as large economies in the Asia-Pacific region, the economic recovery of Japan and South Korea is much slower.
A few days ago, the Bank of Japan issued an economic outlook report, raising its economic growth forecast, and it is expected that the actual GDP will increase by 3.9% in fiscal 2021. The Governor of the Bank of Japan, Haruhiko Kuroda, said that Japan’s economic conditions are gradually improving. The country’s consumption and exports will achieve positive growth in 2021, showing a slow recovery trend. Japan will continue to maintain a proactive fiscal policy and a loose monetary policy and make full use of the development of the global information technology market, which will become the main factors driving Japan’s economic recovery.
Although economic growth is a foregone conclusion, due to the limited amount of growth, the Japanese construction and chemical industry are more cautious about predicting the situation in 2021. Although relative to the darkest period in 2020, major industries have recovered significantly, the overall situation is still difficult to compare with the level of 2019. Japan’s construction and chemical industry operations are to return to the level of 2019 and may only have to wait for the popularization of vaccines and therapeutic drugs, and the process is likely to be postponed to 2022 or 2023 as a result.
In South Korea, experts from the Korea General Managers Association believe that the Korean economy will slowly recover this year, and the economic growth rate will reach 2.4%. Experts believe that the economic shock brought by the COVID-19 epidemic is similar to that of the International Monetary Fund (IMF) foreign exchange crisis. Relevant sources said that experts predict that this year’s economic growth rate will be more conservative than related institutions. Compared with government-led, private-led industrial restructuring is needed to promote economic recovery.
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