Mexico’s Growing Chemical Import Market: An Opportunity for U.S. Suppliers

“Vecina” means neighbor in Spanish. As one of the USA’s largest trading partners, it surprises us how many chemical companies look much farther than Mexico when considering growth opportunities abroad. Especially with what’s been happening next door. 

Over the past decade, Mexico’s chemical supply landscape has undergone significant change. Domestic chemical production has declined from its mid-2010s levels, the country continues to import substantially more chemicals than it exports, and international suppliers have expanded their participation in the Mexican market. The United States remains a dominant chemical supplier to Mexico, but suppliers in China and India are growing their presence much faster. Soon, there may be a new vecina favorita in the Mexican chemical industry. 

Mexico Produces Less Than It Did a Decade Ago

Mexico has a substantial domestic chemical manufacturing industry, but production has weakened from the levels seen during the middle of the last decade.

According to data from Mexico’s National Association of the Chemical Industry (ANIQ), Mexico produced approximately 22.8 million metric tons of chemicals in 2015. Production reached approximately 23.1 million metric tons in 2017 before declining in subsequent years.

By 2023, Mexican chemical production stood at approximately 20.7 million metric tons, which is about 9% below its 2015 level and 10% below its 2017 peak.

The decline hasn't followed a straight line. Production fell particularly sharply around 2019 and 2020 before partially recovering, most likely due to the global COVID-19 pandemic. But even after that recovery, Mexico had not returned to the production levels recorded in the middle of the previous decade.

At the same time, Mexico has remained heavily involved in international chemical trade.

ANIQ reported $28.6 billion in chemical imports in 2015 compared with $8.3 billion in exports, creating a trade deficit of approximately $20.3 billion. In 2018, imports climbed to $34.2 billion while exports reached only $9.1 billion, which is a gap of more than $25 billion.

Even in 2021, ANIQ reported $23.4 billion in chemical imports compared with $6 billion in exports. Throughout the period reported by ANIQ, imports substantially exceeded exports.

How Did Mexico Get Here?

There isn't one policy, administration, or event responsible for Mexico's current chemical supply landscape. In fact, Mexico has pursued dramatically different strategies over the past decade in an attempt to strengthen domestic energy and petrochemical production.

Mexico's major 2013 Energy Reform opened substantially more of the country's hydrocarbons sector to private and foreign investment. The reforms were intended, in part, to attract the investment and technology needed to improve domestic energy production and infrastructure. But opening the industry did not immediately reverse the deterioration occurring in parts of Mexico's domestic petrochemical sector.

Mexico's own government now reports that national petrochemical production experienced a continuous decline beginning in 2010, decreasing at an average annual rate of approximately 8% from 2010 through 2024. The effects weren't theoretical. In some cases, domestic production problems translated directly into a need for imported chemicals.

Ammonia provides a particularly useful example. Between 2013 and 2018, Mexico's petrochemical imports increased, reaching approximately 597,000 metric tons in 2018. According to the Mexican government, operational problems at PEMEX limited domestic ammonia production, making imports necessary to support the country's production of urea.

Mexico Changes Course

Beginning in 2018, Mexico changed its approach. The administration of President Andrés Manuel López Obrador placed much greater emphasis on energy sovereignty, strengthening PEMEX, and rebuilding domestic production rather than relying increasingly on imported energy and petrochemical products. The government announced plans to increase domestic hydrocarbon production and restore PEMEX's productive capacity. Those efforts have continued to evolve.

Mexico's current strategy includes increasing production of products such as aromatics, ethane, ethylene and derivatives, and fertilizers, while modernizing petrochemical complexes and reducing dependence on imports in strategic areas.

There have been signs of improvement. Mexican government data shows petrochemical production increased from 2023 to 2024, while PEMEX's petrochemical imports declined significantly. However, rebuilding manufacturing capacity after years of deterioration doesn't happen overnight. Mexico's broader chemical economy remains deeply connected to international supply.

“Opportunidad” means opportunity, if you didn’t know. 

International Chemical Suppliers Have Already Noticed

If Mexico's chemical demand represents an opportunity, companies outside the United States certainly aren't ignoring it.

World Integrated Trade Solution (WITS) data shows just how dramatically some international suppliers expanded their chemical business with Mexico between 2013 and 2023.

In 2013, Mexico imported approximately:

• $16.34 billion in chemicals from the United States

• $1.69 billion from China

• $518.5 million from India

By 2023, those numbers had increased to:

• $22.53 billion from the United States

• $3.81 billion from China

• $1.07 billion from India

The United States remained by far the largest supplier of the three. But look at the growth rates:

• Over that decade, the value of U.S. chemical supply to Mexico increased approximately 38%

• China increased approximately 125%

• India increased approximately 106%

Put another way, China and India both more than doubled the value of the chemicals they supplied to Mexico in only ten years. Mexico's chemical supply chain has become increasingly global, and international suppliers are competing aggressively for a growing opportunity. U.S. chemical companies should be paying attention.

The Chemical Opportunity Next Door

Mexico's economic development is creating new opportunities for specialty chemical suppliers. A growing population, an expanding middle class, and continued economic development are driving demand for manufactured goods, consumer products, infrastructure, and other industries that depend on specialty chemicals. As these industries grow and evolve, so does their need for reliable access to the chemicals that make their products possible.

The United States has some obvious advantages when doing business with Mexico. We're vecinas. Our economies are deeply interconnected. The USMCA provides an established framework for North American trade, and decades of cross-border business have created extensive transportation, manufacturing, and commercial relationships between our countries.

Unfortunately, proximity alone doesn't guarantee that U.S. companies capture the opportunity. Mexico's chemical market needs more than chemicals manufactured in the United States. It needs reliable access to the right chemicals from the right manufacturers, wherever those manufacturers happen to be.

If a Mexican manufacturer needs a specialty chemical and the best qualified supplier is in South Carolina, great. But if the right manufacturer is in India, China, Europe, or somewhere else in the world, the answer shouldn't suddenly become, “Lo siento, no podemos ayudarle” (“Sorry, we can't help you”).

Finding those suppliers, whether international or domestic, is what we do.

Why SC CHEM Is Focusing on Mexico

At SC CHEM, we're increasing our focus on Mexico because we believe there is an opportunity in this market that many companies haven't fully recognized.

Mexico has significant chemical demand. Its domestic manufacturing base is changing. It relies heavily on international chemical supply, and suppliers from around the world are increasingly competing for that business. We don't see those facts as obstacles.

Our global supplier network allows us to search beyond one manufacturer, one country, or one region to identify the right source for a customer's needs. We can evaluate suppliers, physically vet manufacturing operations, negotiate commercial requirements, and execute the logistics necessary to move products from the manufacturer to the customer.

For companies in Mexico, that means access to a global chemical supply network without having to build every supplier relationship and manage every sourcing challenge alone.

For manufacturers around the world, it means another path into a major North American chemical market.

And for U.S. chemical companies, it means recognizing that some of the industry's most interesting international growth opportunities may be a lot closer to home than we think.