The chemical industry itself is the largest single purchaser of chemical products

Chemicals products are used in a variety of different industries, including automobiles, manufacturing and industrial operations. Many chemical companies process raw materials such as crude oil into more refined products for use throughout the economy. In fact, the industry accounts for about 12% of U.S. manufacturing.

Polymers and plastics

The products produced by chemical industry are widely used in food industry, health care industry and transportation industry. Products from agriculture, manufacturing and consumer goods related industries also depend on chemical companies. The consumption of chemicals in the production of consumer goods is about 10%, but other industries indirectly related to consumer goods also use a large number of chemical products. Common chemical products include pigments, synthetic rubber, polymers, resins and explosives. Plastics, salt, acid and fertilizer are also widely used.

About 80% of the chemical industry involves the production of polymers and plastics. 26% of these products are used by the chemical industry itself for other production processes. Polymers include polyethylene, polyvinyl chloride and polystyrene. The main markets for plastics are packaging, toys, transportation, household appliances and residential buildings.

Global consumer spending and economic growth have driven higher demand for commodities that use chemicals. As chemical companies are very sensitive to market demand, the industry has been paying close attention to the demand of other industries, because the growth of demand for consumer products and the increase of manufacturing activities in turn promote the demand for chemical products.

chemical products

The chemical industry itself is the largest single purchaser of chemical products. These products are used to make reactions and other materials. As a result, factories supplying essential chemicals are often located next to other chemical production facilities. Keeping close (companies that produce the products they need, provide the market, and supply key components) is important to the success of chemical companies.

For many industrial chemical processes, the consumption of raw materials is high, so it is also meaningful for many companies in the industry to set up factories near these raw material producers. Companies with relatively low energy costs can invest in factories near their consumer markets to transport supplies to the site at lower costs. At the same time, production on the continent is likely to increase to meet growing consumer spending, as demand from emerging market economies in Asia increases.

Petroleum and chemical industry

Oil is necessary for the production of many chemical products. Polymers and many plastics are made from it. Due to the large proportion of plastics in the chemical industry, the petroleum industry has a great impact on the production of plastics and polymers. The impact is closely linked to the petroleum and chemical sectors. Oil price fluctuation will have a great impact on the price of chemical products. Some companies pass on these prices to their customers by charging surcharges, thus protecting themselves from cost fluctuations to a certain extent.

The price of other raw materials will also affect the industry, which may reduce demand if the cost is too high. As key suppliers, producers of these materials industries can significantly affect variable costs associated with increased production. Chemical companies must carefully manage supply chain risks to minimize the challenges posed by these costs.

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