Earlier this year, the American Chemical Council (a Washington DC – based trades association) attributed a 5% drop in the specialty chemicals market volume to the Coronavirus pandemic. And in April that market volume decline was even more significant at 12.6%. Over May and June, however, the market has been improving. May saw a gain of 1.2%; and June saw a specialty chemicals market volume increase of 3.6%
Specialty chemicals market data is good news for the beauty industry, halfway through 2020
Despite the overall improvement in June, only 3 specialty chemicals sectors saw year-over-year growth last month: Cosmetic Additives, Flavors and Fragrances, and Electronics.
Cosmetic Additives market volume was up 5.8% over June of last year, while up only 0.3% over the 2019 year-to-date market volume. From April to May of this year, Cosmetic Additives were up 7.8%; and from May to June up 2.2%.
Flavors and Fragrances saw a 4.7% lift in volume from April to May, a 3.0% lift from May to June, and year-over-year growth of 0.3%.
Overall US chemical production is trending downward
Specialty Chemical isn’t just a fancy term for synthesized beauty ingredients. As the America Chemical Council emphasizes in this week’s post about June market data, “Specialty chemicals differ from commodity chemicals. Specialties may only have one or two uses, whereas commodities may have multiple or different applications for each chemical. Commodity chemicals comprise most of the production volume in the global marketplace, while specialty chemicals make up most of the diversity in commerce at any given time and are relatively high value, with greater market growth rates.”
Following from that, it stands to reason that overall US chemical production is trending downward. And a media release circulated this week by the American Chemical Council (ACC) reports that the US Chemical Production Regional Index was indeed down 3.0% in April, 2.0% in May, and 1.1% in June.
“During June, chemical output fell across all regions, with the steepest declines in the Gulf Coast, Midwest and West Coast regions,” notes the release. This despite the fact the US Department of Homeland Security has designated chemical production as an essential industry.
Demand for chemicals is tied to manufacturing more broadly; and the ACC observes that while “overall factory activity was down,”….“As [COVID-19 safety] restrictions ease across most of the US,” factory activity rises.