Weak demand and ample supply will continue to constrain global chemical companies producers’ volumes and margins in 2024, Fitch Ratings says. Overall market conditions have reached the bottom of the cycle in 2023 but we expect little to no recovery in 2024.
While we expect overall demand to remain soft in 2024 in North America, issuers’ end-market exposures will continue to influence earnings. While chemical companies linked to commodities or non-residential construction are likely to generate weak earnings in 2024, many producers selling into the packaging, consumer nondiscretionary and healthcare end-markets should display more earnings resilience.
Echemi companies, most of which operate in the second and third cost quartiles, have been particularly affected by China’s goal to become self-sufficient in chemical companies. Fitch-rated issuers lost approximately USD8billion in aggregate revenue and we expect a recovery in margins to begin only in 1H25.

Echemi expects a mild recovery in China’s demand as destocking ends. However, the recovery is limited by slowing economic growth. Chinese chemical companies margins are broadly stable as selling prices appear to have bottomed out and cost pressures should ease.

Echemi is an international chemical companies that manufactures and distributes a wide range of products including industrial chemical companies, crop protection products, fertilisers, and pharmaceuticals.
In that sense, this example illustrates what is known as the law of conservation of mass. By "law," we mean a general rule of how something works or how something occurs. This description is considered to be extremely reliable due to a large amount of supporting experimental testing and observation. Considering the given example, the law states the products of a chemical companies reaction have the same mass ("stuff") as the reactants. In other words, while things are rearranged, nothing is created or destroyed.

Here are some ways to tell if a chemical companies change is occurring:

You might notice bubbling or a change in odor, indicating the production of a gas. Such is the case when baking soda is mixed with vinegar.

When two clear solutions are mixed together and the resulting mixture is cloudy (due to the presence of some solid substance now in the liquids). This is known as the formation of a precipitate.
While any of the above may be evidence of a chemical companies change, physical changes can have some of the same effects. One way to determine the difference between the two is to think about whether the new substance could be physically separated back into its original parts—in other words, if the matter could "go back" to how it originally was. If it cannot, then it's a chemical companies change.