Hello, this is the ISOL Trend Analysis Team.
The atmosphere in the chemical and materials industry as we approach 2026 is not simple. While the figures suggest a gradual growth trend, the difficulties felt in the industry are actually increasing. The ISOL Trend Analysis Team sees 2026 not as a year of economic improvement,but as a year where the choice of industrial structure creates gaps between companies.
Traditionally, the chemical and materials industry rebounds first during economic recovery phases and is the first to feel pressure during downturns. However, the environment leading to 2026 seems likely to unfold somewhat differently than in the past. While the recovery of demand industries is limited, cost, exchange rate, and regulatory burdens remain structurally.
In particular, in markets centered around general-purpose materials, even if the volume is maintained at a certain level, the environment for recovering profitability is likely to remain challenging. Price increases are likely to face resistance due to slowing demand, and cost increases are continuously accumulating through exchange rates and energy costs. As a result, in 2026, the question of “how much you sell” may be less important than“what structure you sell under.”
Exchange rates and trade environments are also becoming more constants than short-term variables. Since the chemical and materials industry involves cross-border procurement of raw materials and product sales, exchange rate volatility is directly reflected in profit and loss structures. Additionally, with the addition of various countries' trade policies, environmental standards, and anti-dumping issues, the trading conditions themselves are becoming much more complex than in the past.
ISOL sees 2026 as a year whereit will be difficult to maintain transactions solely based on price competitiveness.This is because customers are increasingly likely to prefer partners that can provide stable supply over simply cheaper suppliers. This indicates that in the chemical and materials industry, supply chain stability is moving beyond cost factors to become a standard oftrust and sustainability.
The change in perception of supply chains is particularly important. A structure that is highly dependent on specific countries, specific raw materials, or specific processes may be efficient in the short term, but if the environment changes, the risks can expand rapidly. 2026 is likely to be a point where these structural vulnerabilities begin to be reflected in actual trading and investment decisions.
At the same time, there are certainly opportunities for industrial transformation. Areas such as eco-friendly and low-carbon materials, functional materials, and process efficiency still have high medium- to long-term growth potential. However, ISOL believes it is more realistic to interpret these opportunities not as a means for short-term performance improvement,but as a process of realigning industrial structures.
The same goes for AI. 2026 is likely to be a period where the differences between companies that have accumulated data and understood processes and those that have not gradually become apparent, rather than a year where immediate results from AI implementation are seen. Without organic connections between process data, quality data, and equipment operation data, the effects of AI will inevitably be limited.
The ISOL Trend Analysis Team would like to define the chemical and materials industry in 2026 this way.
"Rather than discussing the growth rate, this is the year to choose a structure that will survive in the next cycle."
The existing growth formula centered on price and volume is approaching its limits. In contrast, the stability of the supply structure, readiness for technological transition, quality of the customer portfolio, and ability to respond to policy risks are becoming increasingly important competitive factors.
2026 may not show significant results immediately. However, when looking back a few years later,the structural choices made during this period could be a turning point that determines the company's position.This possibility seems quite sufficient. ISOL will continue to analyze the changes in the chemical and materials industry from this perspective and organize them into practical insights.
Reference Materials
Samil PwC Management Research Institute, "2026 Domestic and International Economic Outlook"
Ministry of Economy and Finance, "2025 Evaluation and Future Work Direction (Written Report)"