Industry Report: Chemicals & Materials Q4 2024 [Balmoral Advisors]

Key Report Highlights

• Resilient Industry Growth Amid Global Pressures
  The U.S. chemicals sector demonstrated strong demand and profitability in Q4 2024, aided by stable raw material costs, easing inflation, and a steady interest rate environment. However, global overcapacity—especially in Asia—and geopolitical tensions continue to challenge global supply chains and pricing.

• Middle Market Positioned for M&A Acceleration
  Private equity and corporate buyers are eyeing strategic acquisitions, especially tuck-in deals and geographic expansions. With high cash reserves and a backlog of pent-up M&A demand, mid-sized firms are poised to benefit from increasing deal activity through 2025.

• Investment Surge in Specialty & Sustainable Chemicals
  Capital investment rose to $34 billion in 2024, with a strong focus on specialty chemicals, particularly for semiconductors, batteries, and sustainability-aligned initiatives—an opportunity area for innovative middle-market suppliers.

• Policy Shifts Favor Domestic Production
  The business-friendly regulatory environment and growth in domestic oil and natural gas output are improving U.S. competitiveness. However, ongoing tariff risks with China, Mexico, and Canada are prompting companies to restructure supply chains—an opening for middle-market firms in Southeast Asia and Latin America.

• Export Growth and Supply Chain Realignment
  The U.S. chemicals trade surplus reached $25.5B in 2024, driven by strong plastic resin exports and demand in adhesives and coatings. As global firms seek strategic locations to bypass trade barriers, middle-market companies offering specialized capabilities or regional presence may find enhanced acquisition or partnership opportunities.

Balmoral Advisors is an independent, specialty investment bank that provides mergers & acquisitions, corporate finance, and financial restructuring advisory services for mid-sized transactions.

The firm specializes in assisting clients with selling their businesses, completing acquisitions, and raising or refinancing capital. Balmoral Advisors works with business owners, corporations, and financial investors worldwide, advising early-stage growth companies, successful mature businesses, corporate divestitures, and distressed or special situations.

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