Challenging market environment, with a recovery unlikely in the short term

Last update – September 2023
Business environment risk
Political risk
Commercial risk
  • Very diversified end-markets, which limits dependence on purchases from a certain sector.
  • The ecological transition represents an opportunity for expansion in the biofuels business. Other chemicals, such as those used in the production of paper and cardboard, will also continue to be highly demanded in the packaging industry.
  • Companies in the ‘Specialty Chemicals’ subsector enjoy high pricing power.
  • Given the key role of chemical products in global manufacturing, demand will always be granted (in times of industrial activity).
  • The increased production of electric vehicles represents an opportunity for lithium producers (highly used for the manufacture of electric batteries).
  • Large amounts of investments on capex and research & development needed.
  • As an energy-intensive sector, highly vulnerable to energy prices.
  • Revenues for the petrochemical segment are threatened by the lower use of plastics and its derivatives in the years to come amid new environmental regulations.
  • Agrochemical products hardly meeting people’s higher concerns about environmental safety.
  • High reputational risk and many ESG-linked challenges to cope with: decarbonization, water and soil protection, ensuring there are no health problems for both employees and customers, notably with chemicals used in the food industry, among others.
Maria Latorre
Allianz Trade