Year’s end is, of course, the default juncture at which current situations are assessed and forecasts for the future are posited. As this year nears its end, indications are that 2026 will likely be a tough year for much of the chemical process industries (CPI), with weakening demand from many end-use segments, as well as geopolitical tensions and trade uncertainty, making the current environment difficult for many CPI sectors.
According to the recently released 2026 Chemical Industry Outlook from Deloitte Consulting LLP (New York, N.Y.; www.deloitte.com), 2026 is expected to remain challenging for the chemical industry. “Overcapacity in polyethylene, polypropylene and other olefins and aromatics will likely persist. Without renewed market certainty and stability, end-market demand will likely remain subdued, and complex market conditions will continue to strain the industry,” the report says.
Navigating a downcycle can be harrowing, but the report identifies several strategies CPI companies are likely to adopt as organizations await indicators of improvement. These strategies include prioritizing profits through cost-cutting, restructuring and divestments, as well as working to improve supply-chain resilience. In addition, innovation is expected to pay dividends on the other side of a downturn. During periods of weak growth, “innovation is vital… to drive growth, build resilience and gain a competitive edge. It enables differentiation, entry into new markets, and responsiveness to evolving customer needs,” the Deloitte report says.
Another area of strategy focus is sustainability. “Sustainability is poised to be an important driver of capital investment in the chemical industry’s next upcycle, as demand for chemical building blocks is expected to double over the next 30 years,” the Deloitte report says. “Despite current delays and cautious spending, investment in low-carbon solutions and proven technologies — such as carbon capture, clean hydrogen and electrification — will remain essential.”
Specific sustainability activities will necessarily vary with respect to geographic region, industry sector, market conditions and other factors, but the Deloitte report argues that companies that are able to align their portfolios and innovation strategies with regulatory frameworks that encourage lower-carbon production and with growing economic benefits of sustainable products “may be more competitively positioned in the future.”
A recent addition to the American Chemistry Council’s (www.americanchemistry.com) sustainability report underlines this idea. The added chapter, titled “Business Case for Sustainability in the Chemical Industry,” highlights sustainability initiatives as key components of company success in the rapidly changing future world.
“Reducing energy consumption, curbing emissions, optimizing water consumption and reducing waste can create real, measurable, financial value for chemical companies,” the ACC Business Case states. “Such initiatives can help companies drive efficiency, reduce costs and strengthen their competitive edge.” Sustainability and sound business intersect in several areas, including water and energy conservation, and development of new products that address market demands for sustainability, among others.
Whatever conditions the CPI experience in 2026 and beyond, the Chemical Engineering team is committed to supporting those who work in these industries. To all of our readers, authors, advertisers and partners… best wishes for the new year.
Scott Jenkins, senior editor