Market Trends of Singapore Chemical Logistics Industry
Increase in chemical production driving the market
- As a result of lower production at the specialities and petrochemicals segments, Singapore's overall chemicals output in March decreased by 11.8% year over year, according to government figures released on Wednesday. The Economic Development Board (EDB) stated in a statement that "weak market demand and plant maintenance shutdowns" were to blame for the 20.3% year-over-year decrease in petrochemical production in March 2023. Due to lower production of mineral oil and food additives, the specialty segment's output for the month decreased by 6.5%, it stated. When compared to the same period in 2022, the total output of the chemicals cluster, which includes petroleum, declined 13.1% annually from January to March 2023. Singapore's overall industrial production declined in March 2023 at a less pronounced annual pace of 4.2% compared to a 9.7% contraction in February 2023.
- It is getting harder to distinguish Singapore's chemical industry from other sectors, such as food, renewables, and specialized bio-based materials ones. The biggest participants in the chemical and oil industries are also the biggest investors in new forms of energy, such as hydrogen, and chemical companies' research facilities are where the most cutting-edge innovations in carbon capture and sequestration and advanced molecular recycling are developed. While people, engineers, chemists, laborers, and managers travel across various industries more freely than ever, bio-polymers, bio-surfactants, and bio-fuels compete for the same raw materials as food components. They are commercialized on the same digital channels as food ingredients. The fate of the chemical industry is still inextricably linked to that of the oil and gas sector.
- The energy crisis brought on by the reduction in natural gas came as a rude reminder that we are still far from being ready to wean ourselves off carbon sources in a society that is virtuously promising to phase out fossil fuels. The fact that inflation is still present shows how closely the price (and, below it, the availability) of petrol affects the world economy. The picture for advanced countries is becoming more and more clouded by persistent and expanding inflationary pressures as well as aggressive tightening by central banks in response. Consumer and major customer industries, including the automobile and construction sectors, may have substantially declining demand for chemicals as a result of a persistent recession and continuous high inflation.
Understand The Key Trends Shaping This Market
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Investment in logistics services and infrastructure driving the market
- Due to growing device penetration, the average order value per transaction in the Singaporean e-commerce market will rise in the upcoming years. The transparency and security of the supply chain are predicted to improve with technological advancements, increasing cost-effectiveness. Additionally, in the upcoming years, commercial opportunities will be generated by the development of logistical infrastructures such as intermodal connectivity, logistics parks, and ports. The increase in the import and export of raw materials for food and mass-produced goods is the main reason fueling the expansion of the 3PL market in Singapore. The International Chamber of Shipping estimates that roughly 11 billion tonnes of cargo are transported annually on ships. Trade worldwide has significantly increased as a result of globalization. Machinery and transport equipment and petroleum are Singapore's major imports, while refined petroleum products are its largest exports. China, the United States, Indonesia, Malaysia, and Japan are the most important trading partners.
- It is challenging for manufacturers to keep track of supply operations due to market fluctuations. This is why 3PL is growing in significance. Additionally, the growth of international markets may help the sector even more. The market for 3PL usage will experience considerable growth throughout the projected period as firms increasingly view 3PL as a cost-effective option for importing and exporting goods. Due to ongoing labor shortages and supply chain issues, 3PLs have adopted automation and robotic technology to streamline operations across the whole lifecycle. Simultaneously, data-driven ordering, warehousing, and transportation technologies are being leveraged to enhance visibility and communication for consumers, brands, and logistics service providers. Thus, the 3PL market in Singapore is anticipated to show considerable growth due to the rising adoption of technology in logistics.
