The global chemical trade in 2025 stands at a crossroads of disruption and transformation. Tariff conflicts, green policy mandates, and supply chain reconfigurations have shattered the industry’s traditional equilibrium, while the accelerated shift toward sustainable chemicals and the rise of emerging markets are carving out new growth frontiers. Latest trade data and policy developments paint a complex yet actionable portrait of this evolving landscape.
1. Market Status: Divergent Growth and Structural Adjustments
Global chemical trade volumes maintain resilience despite headwinds, with regional markets showing striking disparities. In China, a key exporter, major petrochemical products saw 19.49% year-on-year export growth in September 2025, with 64.5% of monitored products remaining at the 70th percentile of historical export levels or higher . Aromatics emerged as standout performers: benzene ethylene exports surged due to maintenance shutdowns at facilities in Malaysia, Indonesia, and the US, driving China’s shipments to South Korea and India to account for nearly half of total exports . Similarly, PTA exports to Vietnam rebounded by 42.23% month-on-month, fueled by robust demand from the Southeast Asian textile sector .
Globally, capacity expansions are reshaping supply dynamics. The world is set to add 29.86 million tonnes/year of basic petrochemical raw material capacity in 2025, a 35% year-on-year increase, with China contributing over 60% (18.3 million tonnes/year) . This surge, however, has exacerbated oversupply: global ethylene, propylene, and butadiene capacities are projected to exceed demand by 210 million tonnes , pushing Northeast Asian ethylene-naphtha cracking spreads below the break-even point for three consecutive years . Consequently, industry consolidation is accelerating: South Korea’s top 10 enterprises have cut naphtha cracking capacity by 25%, while Dow Chemical has shuttered three plants in Germany and the UK .
2. Core Drivers: Policy Leverage and Demand Transformation
2.1 Tariff Adjustments as a Double-Edged Sword
Tariff policies have become a defining force in reshaping trade flows. The US’s "reciprocal tariff" regime has pushed import duties on Chinese ethylene derivatives to as high as 45%, dragging US imports of Chinese polyethylene to a 16-month low in April 2025 . Mexico followed suit with 50% tariffs on Chinese chemical products, impacting $12 billion in exports and 500,000 jobs . Conversely, targeted tariff cuts are stimulating green growth: China’s 2025 tariff scheme lowered duties on ethane (a low-carbon ethylene feedstock) and cycloolefin polymers, boosting domestic green chemical production and high-end manufacturing .
Regional trade agreements are mitigating tariff risks. RCEP has enabled Chinese enterprises to redirect exports to Southeast Asia, while India’s new Standard Input Output Norms (SIONs) for triethyl phosphate and methyl ethyl ketone peroxide simplify duty-free raw material imports for exporters . Transatlantic tensions saw a temporary reprieve in July 2025, when the US and EU avoided punitive tariffs, preserving their integrated chemical supply chains valued at billions of dollars .
2.2 The Green Chemicals Revolution
Sustainable chemicals have emerged as the fastest-growing segment, driven by policy mandates and consumer demand. The global green chemicals market is projected to reach nearly $210 billion in 2025, with China capturing 30% of the share to become the world’s second-largest market . Export of these products is expanding even faster: China’s green chemical exports grew 35% between 2023 and 2025 , fueled by demand for bio-based materials in packaging and electric vehicle sectors.
Multinational corporations are doubling down on this trend. ExxonMobil is cutting 20% of its European refining capacity to focus on biofuels and renewable chemicals , while BASF’s "net-zero emission" investments are prioritizing recyclable plastic technologies . The US is also leveraging its ethane advantage: expanded export terminals in Texas and Pennsylvania are set to boost ethane shipments by 14% in 2025, with China accounting for 47% of destination demand .
2.3 Emerging Markets as Growth Engines
Demand centers are shifting eastward, with Southeast Asia and South Asia leading consumption growth. Vietnam’s textile boom drove its PTA imports from China to exceed 60,000 tonnes in September 2025 , while India’s construction sector is boosting demand for specialty chemicals . The "Belt and Road" initiative further amplifies this trend, with infrastructure projects increasing demand for basic chemicals and synthetic materials .
Even mature markets show pockets of opportunity. Ukraine, the US, and Nepal emerged as the top importers of construction chemicals in 2025 , while the EU’s launch of the Critical Chemicals Alliance (CCA) aims to secure supplies of strategic molecules, opening avenues for targeted exports .
3. Pervasive Challenges: Barriers and Uncertainties
3.1 Intensifying Trade Barriers
Beyond tariffs, non-tariff obstacles are hindering market access. Indonesia imposes 5% import duties on Chinese polypropylene, while exempting South Korean and ASEAN products ; the EU levies anti-dumping duties of 17.3%-72.9% on Chinese polyvinyl alcohol . Regulatory complexities add layers of friction: India’s BIS certification delays have disrupted maleic anhydride exports , while US customs now enforces stricter origin tracking for chemical imports .
3.2 Supply Chain Vulnerabilities
Logistical and operational challenges persist. Fluctuating sea freight rates and vessel scheduling issues reduced China’s polyether exports in September 2025 , while the US’s revised Foreign Trade Zone (FTZ) rules require duty assessment at entry, increasing working capital pressure for importers . Geopolitical tensions compound these risks: the Red Sea crisis and Middle East unrest continue to disrupt energy and raw material supplies, pushing up production costs .
3.3 Profit Squeeze from Oversupply
Capacity gluts have eroded profit margins across segments. Global polyethylene and polypropylene gross margins have declined steadily since 2021 , with thermal plastic styrene rubber (SBS) facing persistent price inversion—foreign prices exceeded domestic levels by 1,120 yuan/tonne in 2024 . The EU chemical industry is particularly strained: gas prices remain 3.3 times higher than in the US, pushing capacity utilization down to 74% in Q1 2025, well below historical averages .
4. Future Outlook: Strategies for Adaptation and Growth
The 2025 chemical trade landscape demands strategic agility, with three priorities emerging for industry players:
4.1 Embrace Green and High-End Transformation
Investing in sustainable and high-value products is no longer optional. Chinese enterprises like Wanhua Chemical are converting naphtha crackers to ethane feedstock to reduce emissions , while others are accelerating domestic substitution of POE and semiconductor materials . For exporters, aligning with EU and US green standards will be critical to accessing premium markets.
4.2 Diversify Markets and Supply Chains
Enterprises must reduce reliance on single markets. Leveraging RCEP, Chinese petrochemical exporters can deepen penetration in Southeast Asia, while European firms can tap into South Asian construction chemical demand . Building regional supply hubs—such as locating intermediate production in Mexico to bypass US tariffs—will enhance resilience .
4.3 Navigate Policies Proactively
Staying ahead of regulatory shifts is essential. Indian exporters should leverage the new SIONs to cut raw material costs , while global firms must monitor the EU CCA’s critical chemical lists to secure supply chains . Engaging in industry alliances—like the ACC-Cefic collaboration on transatlantic trade—can help shape favorable policy outcomes .
2025 is a pivotal year for global chemical trade: tariff storms and capacity pressures are reshuffling market hierarchies, while green transitions and emerging markets are creating unprecedented opportunities. For enterprises willing to embrace innovation, diversify strategically, and align with sustainability trends, the current upheaval will not just be a test of resilience—but a gateway to long-term competitiveness.