Commodity Chemicals

Commodity chemicals

Commodity chemicals (or bulk commodities or bulk chemicals) are a group of chemicals that are made on a very large scale to satisfy global markets. The average prices of commodity chemicals are regularly published in the chemical trade magazines and web sites such as Chemical Week and ICIS. There have been several studies of the scale and complexity of this market for example in the USA.

A commodity chemical that has become completely interchangeable is known as a “fungible” material. This means there is absolutely no difference between one manufacturer’s product and another. This is the biggest difference between specialty chemicals vs commodity chemicals, as the commodity chemical is entirely standardized, and you know exactly what you will get from it. An example of a fungible chemical is natural gas.

Commodity chemicals are a sub-sector of the chemical industry (other sub sectors are fine chemicals,specialtychemicals, inorganic chemicals, petro chemicals, pharmaceuticals, renewable energy (e.g. biofuels) and materials (e.g. biopolymers)) Commodity chemicals are differentiated primarily by the bulk of their manufacture.

What Is the Difference?

First, let’s clear up what commodity and specialty chemicals are. Commodity chemicals are, as the name suggests, common chemicals that can be produced in bulk quantities by a large number of chemical manufacturers. The production quality of these chemicals varies little, being developed in a very standardized form with exact compositional matches.

Specialty chemicals, on the other hand, are more exclusive when it comes to the manufacturers able to produce them. These chemicals are geared toward specific services and customer needs, rather than general use. Specialty chemicals are often restricted to specific manufacturers because of patents, but as those patents expire and market demand grows, specialty chemicals can become commodity chemicals over time.

Sectors

Commodity chemicals are produced to supply diverse but usually well-defined industrial needs. Some major sectors and their components are:

• plastics, synthetic fibers, synthetic rubber
• dyes, pigments, paints, coatings
• fertilizers, agricultural chemicals, pesticides
• cosmetics, soaps, cleaning agent, detergents
• pharmaceuticals
• mining