Forecasting remains one of the most important planning tools in the chemical industry.
Investment decisions, production planning, procurement budgets, inventory strategies and long-term supply agreements are all influenced by expectations about future demand, commodity prices and global economic activity.
However, the experience of 2025 and the first half of 2026 demonstrates an important reality: industry forecasts are valuable planning tools—but they are not predictions.
Several leading market outlooks anticipated that the global chemical industry would return to stronger growth during 2025. Instead, actual industry performance proved considerably weaker than expected as geopolitical disruption, slowing economic activity and persistent trade uncertainty reshaped global markets.
For procurement professionals, understanding why forecasts missed the mark is more useful than simply knowing that they did.
Forecasts Expected a Stronger Recovery
At the beginning of 2025, many industry outlooks projected that global chemical production would accelerate as inflation moderated, manufacturing activity recovered and industrial demand strengthened.
Growth expectations generally centred around a meaningful recovery supported by:
Lower inflation.
Improving manufacturing output.
Stronger industrial demand.
Stabilising energy markets.
Continued recovery in global trade.
Instead, industry growth remained well below many initial expectations.
The difference between projected growth and actual performance illustrates how quickly external events can reshape even carefully constructed market outlooks.
Economic Assumptions Changed Faster Than Expected
One major forecasting challenge involved the broader macroeconomic environment.
Several economies experienced slower growth than anticipated as:
Industrial production weakened.
Manufacturing activity remained uneven.
Business investment slowed.
Consumer demand softened in several markets.
Because chemical demand closely follows industrial activity, these macroeconomic changes directly influenced production volumes across multiple chemical sectors.
Geopolitical Events Were Never Part of the Base Case
Perhaps the largest forecasting gap involved geopolitical risk.
Annual industry outlooks generally rely upon baseline economic assumptions rather than low-probability geopolitical scenarios.
As a result, few published forecasts incorporated the potential effects of:
Major shipping disruptions.
Maritime security crises.
Extended freight inflation.
Supply chain rerouting.
Regional energy market disruption.
The Hormuz crisis demonstrated how rapidly an external geopolitical event can alter procurement economics without fundamentally changing underlying chemical demand.
Trade Tensions Continued Influencing Global Markets
Forecasting models also struggled to fully capture the continuing impact of international trade policy.
Ongoing tariff measures, anti-dumping investigations and shifting industrial policies influenced:
Global trade flows.
Investment decisions.
Regional competitiveness.
Manufacturing costs.
Supply chain restructuring.
These policy developments evolved throughout the year, making them difficult to incorporate accurately into forecasts published months earlier.
Forecasts Are Better at Trends Than Timing
One of the most important lessons from 2025–2026 is that many industry forecasts correctly identified long-term structural trends while missing the timing of short-term developments.
Several structural themes proved accurate:
Continued investment in specialty chemicals.
Greater supply chain diversification.
Regionalisation of manufacturing.
Sustainability-driven capital investment.
Increased procurement focus on resilience.
However, the pace and sequence of these changes differed considerably from original expectations due to unforeseen external events.
Procurement Teams Should Use Forecasts as Scenarios, Not Certainties
The events of the past eighteen months demonstrate that forecasts are most valuable when treated as planning scenarios rather than fixed expectations.
Rather than building procurement strategies around a single market outlook, leading organisations increasingly prepare for multiple possible outcomes.
A practical forecasting framework should include:
A base-case scenario reflecting consensus industry expectations.
An upside scenario based on stronger-than-expected economic growth.
A downside scenario incorporating geopolitical or macroeconomic disruptions.
Regular quarterly reviews as market conditions evolve.
Procurement flexibility that allows purchasing volumes to adjust when assumptions change.
This approach reduces the risk of making long-term commitments based on forecasts that may quickly become outdated.
The Most Reliable Forecasts Focus on Structural Trends
While annual growth projections often prove vulnerable to unexpected events, long-term structural trends have generally been more reliable.
Procurement teams should place greater confidence in developments such as:
Continued investment in specialty chemicals.
Regional diversification of manufacturing.
Multi-origin sourcing strategies.
Digital supply chain visibility.
Sustainability and decarbonisation initiatives.
Increasing emphasis on supply chain resilience.
These structural themes evolve over many years and are typically less affected by temporary market disruptions than annual production forecasts.
Forecast Risk Should Become Part of Procurement Planning
Rather than asking whether a forecast will prove correct, procurement professionals should ask how their sourcing strategy would perform if the forecast proves wrong.
Key questions include:
Can supplier contracts accommodate demand changes?
Is inventory sufficient for unexpected logistics disruption?
Are alternative suppliers already qualified?
How sensitive are procurement costs to freight or energy price changes?
Can purchasing volumes be adjusted without major contractual penalties?
These questions shift planning from prediction toward resilience.
Build Flexibility Instead of Chasing Precision
One of the most significant lessons from 2025–2026 is that attempting to forecast exact market outcomes is becoming increasingly difficult.
Instead, competitive advantage comes from building organisations capable of responding quickly when conditions change.
Successful procurement teams increasingly prioritise:
Flexible supplier agreements.
Diversified sourcing regions.
Rolling demand forecasts.
Regular market intelligence reviews.
Cross-functional coordination between procurement, logistics and finance.
This adaptive approach enables companies to respond more effectively when assumptions inevitably change.
Looking Ahead to H2 2026
The forecasting experience of 2025–2026 provides an important reminder that even the most respected industry outlooks are built upon assumptions that can change rapidly. Slower economic growth, geopolitical disruption, trade policy developments and supply chain shocks combined to produce industry outcomes that differed materially from many early-year expectations.
Rather than reducing the value of forecasts, these events highlight how forecasts should be used. They remain essential planning tools, but they are most effective when viewed as informed scenarios rather than definitive predictions. Procurement organisations that regularly compare forecast assumptions with emerging market realities are far better positioned to adapt than those relying on annual outlooks without continuous reassessment.
For H2 2026, the objective should not be to identify the single "correct" forecast. Instead, procurement teams should combine market forecasts with real-time logistics intelligence, commodity pricing, supplier performance and geopolitical developments to support agile decision-making. In an increasingly uncertain operating environment, planning flexibility has become a greater competitive advantage than forecasting precision.
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Betaine Anhydrous CAS: 107-43-7