The Great Chemical Paradox of 2026
The global chemical industry entered 2026 facing its deepest restructuring cycle in over a decade. BASF, the world’s largest chemical manufacturer, posted a 38.8% decline in earnings for 2025 and has eliminated 4,800 jobs globally. Dow Chemical reported a $657 million loss in January 2026 alone and announced an additional 4,500 layoffs. LyondellBasell saw profits collapse by 72.4%, while Celanese recorded a 51.1% earnings drop, dragged down by weak automotive and construction markets.
Yet amid this commodity carnage, specialty construction chemicals remain a strikingly resilient growth engine. The waterproofing chemicals market is projected to surge from US$ 7.8 billion in 2025 to US$ 13.3 billion by 2033 at a 6.90% CAGR. The global dry-mix mortar market stands at US$ 42.83 billion in 2026 and is forecast to reach US$ 54.26 billion by 2030 (6.1% CAGR). The overall construction chemicals market is valued at US$ 90.65 billion in 2026, growing at 5.5% CAGR toward US$ 118.53 billion by 2031.
This divergence — brutal cost-cutting upstream, robust demand downstream — is fundamentally reshaping who produces construction chemicals, where they are sourced, and what buyers must plan for in the second half of 2026 and beyond.
BASF’s “CoreShift” and the Flight to Specialty
In May 2026, BASF launched “CoreShift,” a company-wide transformation program targeting up to 20% net cash fixed cost savings in core businesses by 2029, measured against a 2024 baseline. A newly established Core Transformation Office, led by Julia Raquet reporting directly to CEO Dr. Markus Kamieth, oversees the initiative across all business divisions, service units, and corporate centers.
BASF’s restructuring reflects a broader industry pattern:
- BASF: US$ 2.7 billion in targeted cost savings by end-2026 (up from US$ 2 billion already realized since 2023); coatings division controlling stake sold to Carlyle and Qatar Investment Authority
- Dow: US$ 2 billion cost-savings target with 6,000 total positions eliminated (1,500 earlier + 4,500 new)
- Eastman: US$ 125–150 million in cost cuts planned for 2026, after a 32.7% earnings decline in 2025
- Solvay: US$ 235 million per year in cost reductions; closed peroxide plants in the UK and Portugal, plus a trifluoroacetic acid unit in France
- Celanese: Actively shopping US$ 1 billion in assets for divestiture after a 51.1% profit collapse
The strategic implication is clear: major producers are exiting commodity segments and concentrating capital on high-margin specialty portfolios. For construction chemicals, this means fewer commodity feedstock suppliers, tighter supply for certain intermediates, and longer lead times for volume buyers.
Waterproofing Chemicals: The US$ 13.3 Billion Opportunity
While upstream commodity players retrench, the waterproofing chemicals segment is experiencing a powerful demand expansion. According to Business Market Insights, the global waterproofing chemicals market will grow from US$ 7.8 billion (2025) to US$ 13.3 billion (2033), registering a 6.90% CAGR.
Five structural drivers are propelling this growth:
- Climate adaptation: Increasing frequency of extreme weather events — floods, heavy rainfall, and rising water tables — is making waterproofing a non-negotiable specification in both residential and commercial projects
- Infrastructure renovation: Aging building stock in North America and Europe requires massive waterproofing remediation, creating a replacement-demand cycle independent of new construction
- Low-VOC and green formulations: Regulatory tightening around volatile organic compound emissions is driving innovation in water-based, solvent-free waterproofing systems — a segment growing faster than conventional alternatives
- Liquid-applied membranes: Faster application, seamless coverage, and compatibility with complex geometries are making liquid-applied systems the preferred choice for both new builds and retrofit projects
- Multifunctional systems: Demand is rising for waterproofing solutions that simultaneously provide thermal insulation, crack bridging, and environmental protection in a single system
For additive suppliers, this trend translates directly into demand for cellulose ethers (HPMC, HEC) as thickening and water-retention agents in waterproofing mortars, redispersible polymer powder (RDP) for flexible, crack-resistant membrane formulations, and crystalline waterproofing admixtures that penetrate concrete capillaries to form insoluble crystal barriers.
Cellulose Ethers: Construction Remains the Anchor
The cellulose ether market continues to evolve along a dual trajectory. Construction-grade products account for 42% of total cellulose ether demand, making building applications the single largest end-use segment by a wide margin. Building-grade HPMC pricing currently ranges from US$ 0.80 to US$ 3.80 per kilogram in bulk, reflecting significant variation by viscosity grade, substitution type, and regional origin.
Key dynamics shaping the mid-2026 cellulose ether landscape:
- HPMC vegetable capsules: This niche is the fastest-growing segment at a 9% CAGR, driven by the global shift from animal-derived gelatin to plant-based alternatives meeting Halal, Kosher, and vegan certifications. The HPMC capsule market alone is projected to reach US$ 1.29 billion by 2035
- North America HPMC: Growing at 7% CAGR through 2033, fueled by demand for high-purity, low-nitrosamine grades in pharmaceutical applications
- HEC in personal care: Hydroxyethyl cellulose is gaining momentum in clean-label cosmetics, with Asia-Pacific accounting for 38% of global demand
- Raw material cost pressure: Wood pulp and cotton linter price volatility continues to compress margins for Chinese construction-grade HPMC producers, creating a highly competitive — almost red-ocean — market segment
For construction chemical formulators, the takeaway is that while pharmaceutical and personal-care segments command premium pricing, construction remains the volume backbone of the cellulose ether industry. Suppliers who can deliver consistent quality at competitive construction-grade pricing hold a structural advantage.
Dry-Mix Mortar and RDP: Steady Growth with Regional Variation
The global dry-mix mortar market, valued at US$ 42.83 billion in 2026, continues its steady expansion at 6.1% CAGR toward US$ 54.26 billion by 2030. Redispersible polymer powder (RDP), the critical flexibility and adhesion modifier in tile adhesives, exterior insulation finishing systems (EIFS), and self-leveling compounds, remains a key demand driver within this segment.
Several trends are shaping RDP demand in mid-2026:
- Asia-Pacific dominance: The region accounts for approximately 45.55% of global RDP demand, driven by China’s ongoing urbanization, India’s infrastructure build-out, and Southeast Asia’s construction boom
- EIFS expansion: Energy-efficiency mandates across Europe and North America are accelerating EIFS installations, where RDP content can reach 3–5% of total formulation weight
- Self-leveling growth: The rise of renovation and retrofit projects is boosting demand for self-leveling underlayments, a high-RDP-content application segment
- Vinyl acetate-ethylene (VAE) supply: BASF’s restructuring could tighten VAE emulsion supply — the primary feedstock for RDP — potentially impacting pricing and availability through late 2026
PCE Superplasticizers: Innovation Amid Cost Pressure
The polycarboxylate ether (PCE) superplasticizer segment represents another bright spot in an otherwise pressured chemical landscape. The global PCE market is growing at approximately 13.7% CAGR, driven by demand for high-performance, low-water concrete in infrastructure and high-rise construction.
Recent research developments are expanding the performance envelope:
- Crack-resistant PCE: A novel polycarboxylate superplasticizer with integrated crack-resistance functionality was reported in a February 2026 study in Cement and Concrete Composites, combining workability enhancement with shrinkage reduction in a single molecule
- Low-cost PCE synthesis: A March 2026 paper demonstrated a new PCE synthesis route using specialized monomers and macro-monomers, achieving lower cost and higher efficiency compared to conventional processes
- Bio-based alternatives: Research continues into partially bio-sourced polycarboxylate ethers, aiming to reduce reliance on petroleum-derived raw materials while maintaining dispersion performance
These innovations are particularly significant given the upstream cost pressures from the broader chemical restructuring. When commodity feedstock suppliers are cutting capacity, innovations that reduce raw material intensity or substitute bio-based inputs become commercially urgent, not merely academic exercises.
What Buyers and Formulators Should Watch in H2 2026
The collision of supply-side restructuring and demand-side growth creates a distinctive market environment for construction chemical buyers and formulators. Key considerations include:
- Supply chain diversification: With BASF, Dow, and Solvay closing plants and exiting commodity lines, reliance on a single supplier for key intermediates (VAE emulsion, acrylic monomers, cellulose pulp) carries increasing risk
- Price volatility: Reduced capacity in upstream commodity chemicals creates uneven supply-demand dynamics that can trigger sudden price spikes for construction-grade additives
- Regional sourcing advantage: Chinese and Indian cellulose ether and RDP producers benefit from proximity to raw materials and lower production costs, making them increasingly attractive as Western producers concentrate on specialty margins
- Specification agility: With some products being discontinued as producers streamline portfolios, formulators must maintain flexible specifications and qualify alternative raw materials proactively
- Green chemistry premium: Low-VOC waterproofing systems, bio-based PCE, and sustainable cellulose ether production processes command price premiums that are increasingly accepted by specification writers and project owners
The construction chemicals sector is not immune to the broader chemical industry’s challenges — but it is substantially insulated by structural demand from urbanization, climate adaptation, and infrastructure investment. Companies that navigate the supply-side disruption while capitalizing on the demand-side growth will define the competitive landscape for the remainder of the decade.
Looking for a reliable construction chemicals partner who understands both the science and the supply chain? Hosechem specializes in cellulose ethers (HPMC, HEMC, HEC), redispersible polymer powder (RDP), and dry-mix mortar additives — delivering consistent quality, competitive pricing, and technical expertise from one of Asia’s most experienced construction chemical producers. Contact Hosechem today to discuss your formulation requirements.