Construction Chemicals Market - Growth Drivers and Challenges:
Growth Drivers
- Innovation in catalytic green technologies: Progress in green chemistry in the US and EU is promoting the use of catalytic systems. Advanced catalysts have improved chemical yield efficiency by approximately 21%. These systems also reduce carbon emissions throughout production processes. Manufacturers gain from decreased carbon intensity in their outputs. This transition attracts infrastructure developers who prioritize ESG objectives. More sustainable production is in line with climate disclosure and tax credit benefits. It is transforming the formulation and sourcing of construction chemicals.
- Renewable chemicals market expansion: The global market for renewable chemicals was assessed at USD 252.5 billion in 2023. It's expected to reach USD 572 billion by 2028, growing at a rate of about 11.6% CAGR. The main factors driving this growth include the need for environmentally friendly construction binders and additives. The adoption of eco-friendly materials is on the rise in public infrastructure projects. Biobased chemicals provide lower toxicity levels and a smaller environmental impact. Governments are promoting the research and development of eco-friendly building materials. Construction companies are progressively adopting renewable chemistries for compliance and branding purposes.
1. Global Construction Chemicals Demand Analysis
Construction Chemicals Demand Trends by Sector & Application
|
Sector/Application |
Key Demand Drivers |
Top Consuming Countries |
Notable Projects/Regulations |
Material Innovation Trends |
|
Residential Construction |
• 68% global urban population by 2030 (UN) |
China, India, U.S. |
EU’s Energy Performance of Buildings Directive (EPBD) |
Low-VOC waterproofing membranes (+40% adoption) |
|
Commercial Real Estate |
• 40% increase in LEED-certified offices since 2020 |
UAE, Germany, Singapore |
Dubai 2040 Urban Master Plan ($300B) |
Self-cleaning façade coatings |
|
Roads & Bridges |
• $2.2T global infra spending (2024) |
U.S., India, Japan |
U.S. Bipartisan Infrastructure Law ($550B) |
Carbon-fiber reinforced concrete |
|
Industrial Facilities |
• 200% growth in EV battery plants |
Germany, Vietnam, Mexico |
Tesla Gigafactories (Berlin, Texas) |
Epoxy coatings with 50% recycled content |
|
Repair & Rehabilitation |
• 60% EU buildings pre-1980s |
Italy, Turkey, Canada |
EU Renovation Wave (35M energy-efficient retrofits by 2030) |
Nano-modified repair mortars |
2. Construction Chemicals Price Trends and Influencing Factors
Price History and Unit Sales Volumes (2019–2024)
|
Year |
Region |
Avg. Price Trend |
Unit Sales Volume (million metric tons) |
Notes |
|
2019 |
North America |
Stable |
4.2 |
Moderate demand, steady raw material costs |
|
2019 |
Europe |
Stable |
3.6 |
Post-2018 regulatory adjustments impacting production |
|
2019 |
Asia |
Rising (3%) |
6.8 |
Urban infrastructure projects driving demand |
|
2020 |
North America |
Decreased (5%) |
4.1 |
COVID-19 pandemic supply chain impacts |
|
2020 |
Europe |
Decreased (7%) |
3.4 |
Lockdown-related slowdowns |
|
2020 |
Asia |
Decreased (2%) |
6.6 |
Initial pandemic disruptions |
|
2021 |
North America |
Increased (10%) |
4.2 |
Recovery with supply chain constraints |
|
2021 |
Europe |
Increased (12%) |
3.6 |
Ethylene price surge by 15% in Asia |
|
2021 |
Asia |
Increased (15%) |
7.1 |
Supply chain disruptions led to an ethylene price spike |
|
2022 |
North America |
Increased (8%) |
4.4 |
Rising raw material costs and energy prices |
|
2022 |
Europe |
Increased (30%) |
3.8 |
The Russia-Ukraine conflict caused ammonia prices to spike |
|
2022 |
Asia |
Increased (10%) |
7.2 |
Gradual normalization post-pandemic |
|
2023 |
North America |
Stable (2%) |
4.5 |
Stabilization as supply chains improve |
|
2023 |
Europe |
Stable (3%) |
3.9 |
Regulatory compliance costs normalized |
|
2023 |
Asia |
Stable (5%) |
7.4 |
Increasing infrastructure investment |
|
2024 |
Global |
Forecasted Rise |
15.6 |
Expected moderate growth due to post-pandemic demand rebound |
Key Factors Affecting Price Fluctuations
|
Factor |
Impact on Prices (%) |
Description |
|
Raw Material Costs |
30–40% |
Crude oil and natural gas price volatility strongly influences chemical feedstock costs. |
|
Geopolitical Events |
35–45% |
The 2022 Russia-Ukraine conflict caused a 32% spike in European ammonia and sulfuric acid prices |
|
Environmental Regulations |
20–25% |
The EU's REACH and stricter EPA policies increased compliance costs, impacting pricing structures. |
3. Composition and Financial Overview of Japan’s Construction Chemicals Shipments
Shipment Values and Market Shares by Chemical Category (2018-2022)
|
Category |
2018-2022 Shipment Value (¥ Trillion) |
CAGR (%) |
Notes |
|
Petrochemicals |
13 |
— |
46% of total shipments (2022) |
|
Polymers |
7.9 |
— |
31% share |
|
Specialty Chemicals |
6.3 |
— |
26% share |
Shipment Value Growth and Key Industry Drivers (2018–2023)
|
Industry |
Shipment Value Growth CAGR (2018-2023) |
Notes |
|
Automotive |
9% |
Demand for lightweight materials |
|
Electronics |
6% |
Growth in high-performance materials |
|
Pharmaceuticals |
5% |
Steady increase |
R&D Spending and Profitability of Leading Chemical Companies (2022–2023)
|
Company |
R&D Spending 2022 (¥ Billion) |
Profit Growth 2023 (%) |
Profit (¥ Trillion) |
Notes |
|
Mitsubishi Chemical |
160 |
— |
— |
Focus on bioplastics |
|
Shin-Etsu Chemical |
— |
13% |
1.3 |
Outperformed global peers |
Challenges
- Barriers to market access from trade policies: The World Trade Organization (WTO) points out that both tariff and non-tariff barriers are major hurdles for global chemical trade. Countries with emerging economies often set tariffs between 8% and 11% on chemical imports, which raises costs for international suppliers. On top of that, complicated customs processes lead to delays and increase administrative costs. These issues make it harder for suppliers to enter the market and expand their operations worldwide. Moreover, these barriers also obstruct the international spread of cutting-edge chemical technologies, which in turn hampers the overall growth and competitiveness of the industry.
- High investment requirements for cleaner technologies: Tighter environmental rules are pushing for significant investments in cleaner production technologies. In 2023, BASF pledged $600 million towards green chemistry projects to comply with EU REACH standards, which led to a 17% boost in its market share in Europe. On the flip side, smaller manufacturers frequently struggle with funding, which hampers their capacity to make similar improvements. This gap in resources limits their competitiveness on a global scale and hinders the broader shift towards sustainable chemical production throughout the industry.
Construction Chemicals Market Size and Forecast:
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
5.3% |
|
Base Year Market Size (2024) |
USD 44.4 billion |
|
Forecast Year Market Size (2037) |
USD 84.8 billion |
|
Regional Scope |
|
