chemical manufacturer are currently confronted with multiple challenges in the market environment, primarily encompassing escalating costs, stringent regulations, underwhelming demand, and intense competition. The specific details are as follows:
- Cost Pressures
    - Raw Material Costs: The prices of raw materials such as crude oil, natural gas, and minerals are prone to fluctuations. For example, the European chemical industry has been grappling with high - cost pressures due to the significant increase in natural gas prices following the Russia - Ukraine conflict. Additionally, supply chain disruptions can also result in higher raw material costs and supply uncertainties.
    - Energy Costs: As energy - intensive enterprises, chemical manufacturer consume substantial amounts of energy in their production processes. In the second quarter of 2024, the energy costs for fuel and power in the chemical industry increased after a period of decline.
    - Labor Costs: The labor costs in the chemical industry have been on the rise. In the first quarter of 2024, labor costs continued to increase following the upward trend in each quarter of 2023, and this upward trend persisted in the second quarter.
    - Transportation Costs: The transportation costs for chemical products are relatively high due to their special nature. In the first and second quarters of 2024, the transportation costs in the chemical industry increased after a period of decline in 2023.
- Stringent Regulatory Requirements
    - Environmental Protection Regulations: With the increasing global emphasis on environmental protection, chemical manufacturer are subject to strict regulations regarding emissions of waste gas, wastewater, and solid waste. For instance, the EU's REACH Regulation demands the registration and risk assessment of chemicals.
    - Workplace Safety Regulations: Given the potential hazards of chemical production, such as toxicity and flammability, there are strict safety regulations regarding production processes and worker operations. For example, in the United States, chemical manufacturer must comply with OSHA standards.
- Weak Market Demand
    - Sluggish Economic Growth: The global economic growth is lacking momentum. The OECD has adjusted its global economic growth forecast for 2024 to 2.7%, a 0.2 percentage point decrease from June. The weak economic conditions in major economies like Germany and the United States have suppressed the demand for chemical products.
    - Fluctuations in International Trade: Geopolitical conflicts and trade protectionism have led to fluctuations in international trade. The EU chemicals trade surplus decreased by 25% in the first two months of 2025 due to increasing imports. The trade environment for European chemical companies is at high risk due to US tariffs.
- Intense Global Competition
    - Oversupply in the Market: In recent years, the production capacity of the global chemical industry has continued to expand, resulting in an oversupply in the market for many chemical products. European chemical producers are facing increased competitive pressure from newer and more efficient plants and refineries in the United States, China, and the Middle East.
    - Homogeneous Competition for Products: The problem of product homogeneity among chemical manufacturer is relatively prominent, especially in the basic chemical industry. This has led to fierce price competition among enterprises, compressing profit margins.