Global Chemical Growth to Slow to 3% in 2025; PL Capital Recommends Six Stocks with Up to 31% Upside
- 25th June 2025
- 01:30:00 PM
- 4 min read
Mumbai | June 25 – Muted demand, pricing pressures, and weak farm incomes to weigh on chemical sector next year, says PL Capital
The global chemical industry is expected to enter a slower growth phase in 2025, with overall expansion projected at just 3%, down from 3.9% in 2024, according to a new report released by PL Capital. The outlook excludes the pharmaceutical segment and reflects a challenging macro environment, particularly across agriculture-linked chemical demand.
China — which dominates the global landscape with 86% of total chemical production — is also witnessing a marked slowdown. Growth in Chinese chemical output is expected to moderate sharply to 4.2% in 2025, from 6.8% in 2024. While the country will likely continue to outperform other regions, this deceleration raises broader concerns about global end-use demand.
Sector Outlook: Demand Remains Subdued, Crop Protection Under Pressure
The pressure is particularly evident in the crop protection segment, which saw a difficult 2024 and is expected to underperform again in 2025. PL Capital attributes this weakness to a combination of factors: subdued farm incomes, increased competition from generics, and active destocking by customers in major markets.
Agri-commodity prices have played a key role in this downturn. Prices of corn and soybean — essential crops in the US and other regions — declined 33% and 23% respectively last year, reducing farmer earnings and thereby curbing agrochemical purchases. Although early 2025 saw a slight recovery, prices remain well below their 2023 levels, limiting any meaningful rebound in farm-related chemical demand.
Adding to this is the continued influx of generic products, putting downward pressure on pricing. Global chemical majors have also highlighted concerns over tariff uncertainties, supply-chain realignments, and weaker seasonal demand visibility, which together are expected to extend margin pressures into 2025.
“Despite global headwinds, certain chemical stocks have shown strong trend reversals and breakout patterns. We remain selective, favouring names with low agrochemical dependence and healthy technicals,” said Vaishali Parekh, Vice President – Technical Research, PL Capital.
The brokerage has identified six stocks showing promising setups, each with an estimated upside potential between 25% and 31%.
Stock Picks: Six Chemical Stocks to Watch
Aarti Industries: The stock has shown a decisive breakout from key support zones and now trades above its 200-day moving average — a positive signal for technical momentum. PL Capital expects a move to ₹600 from the current market price (CMP) of ₹469, offering a potential 27.9% upside. A stop loss is suggested at ₹420.
Archean Chemical: With a series of higher bottom formations and bullish RSI indicators, the stock is maintaining strong technical posture. PL Capital forecasts a target of ₹820 (CMP: ₹624), representing a 31.4% potential gain.
Clean Science and Technology: Trading comfortably above both its 50- and 200-day moving averages, Clean Science appears well-positioned for further upside. The technical target is set at ₹1,900, up from a CMP of ₹1,502.
GHCL Ltd: A double-bottom pattern and improving momentum indicators support a near-term rally. The stock is currently trading at ₹615, with a technical target of ₹790, implying a 28.5% upside.
PCBL Chemical: After forming a strong base around the ₹348 mark, PCBL has broken out above key moving averages. The upside target is ₹500 from a CMP of ₹399.
Thirumalai Chemicals: The stock has reversed positively from a higher-bottom formation, and RSI signals a potential breakout. PL Capital pegs a target of ₹380 (CMP: ₹293), with nearly 30% upside potential.
Bottomline:
While the broader chemical sector remains structurally challenged, especially in agro-linked segments, stock-specific technical setups are creating room for tactical trades. PL Capital recommends a selective approach, focusing on companies with diversified business models, strong price action, and reduced dependence on cyclical agri-demand.
As 2025 shapes up to be a year of consolidation for global chemicals, investors may find value in chart-driven strategies over sector-wide bets.
PL Capital
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
