Heading into 2026, U.S. solvent markets tied to construction, automotive, inks, and adhesives remain caught between tariff-driven cost pressures, weak manufacturing output, and pockets of structural growth in packaging, EV production, and high-performance adhesives. U.S. manufacturing continues to contract, with the November ISM reading at 48.2, while tariffs on vehicles, auto parts, and heavy trucks weigh on costs and production. Construction activity is expected to slow through late 2025 and into 2026 as tariffs on steel, aluminum, and other inputs raise project costs and introduce delays.
Global light-vehicle production has been revised upward for 2025 but trimmed for 2026–27, reflecting normalization and lingering trade friction. In contrast, packaging inks and adhesives/sealants are projected to continue growing at mid-single-digit rates between 2025 and 2034, driven by packaging demand, infrastructure activity, and high-performance industrial applications.
Overall, solvent demand is expected to remain relatively stable compared to 2025. Most of the stagnation stems from weaker construction and automotive activity, although inks and adhesives are expected to post modest growth. If interest rates ease and consumer confidence improves, construction-related demand could strengthen, introducing more pricing volatility as supply becomes a greater determinant. Conversely, if consumer sentiment deteriorates and material costs remain volatile, solvent demand could slow further as sellers face reluctance from buyers who are already purchasing only to meet immediate needs.
Construction is a major outlet for solvents, and costs rose substantially in 2025 due to steep tariff increases on steel, aluminum, and lumber. Tariffs on construction imports increased from approximately 0.09 percent prior to 2025 to nearly 27.7 percent. Other sources reported annualized material-cost inflation of around 6 percent through May 2025. Higher costs and a change in administration led to delayed or canceled construction and infrastructure projects. As a result, construction-related solvent demand is expected to remain weak to slightly soft through the first half of 2026.
Automotive markets are expected to begin 2026 on uneven footing. Current forecasts indicate that global light-vehicle production will stabilize after the 2025 rebound but lose momentum as inventories normalize and tariff uncertainty disrupts cross-border supply chains. U.S. vehicle demand continues to face pressure from higher financing costs and weakened consumer confidence.
EV and hybrid production remains a growth area and is expected to continue outpacing conventional vehicle segments, but this shift does not fully offset the softer volumes in the broader automotive market. Solvent demand for OEM and refinish coatings is projected to remain steady, with a slight softening, as formulators report conservative order books and a limited willingness to build inventory. Any recovery will depend on clearer macroeconomic signals and improved consumer sentiment.
Inks markets enter 2026 with a mixed profile. Packaging remains the strongest segment, supported by continued growth in food, logistics, and e-commerce applications, as well as shifts toward low-migration and high-performance systems. This underpins stable to modest solvent demand for certain flexographic and gravure formulations.
Commercial and publication printing, however, remain structurally challenged and continue to show declining solvent consumption. Cost sensitivity among converters and brand owners may limit discretionary reformulation or early-year inventory builds. Overall, packaging inks provide a steady demand floor, while traditional solvent-heavy printing applications continue to shrink.
Adhesives demand heading into 2026 reflects healthy structural fundamentals but weak cyclical momentum. Global growth remains in the low- to mid-single-digit range, supported by packaging, transportation, electronics, and select industrial applications. Demand tied to residential and commercial construction may remain soft due to tariff-driven material inflation and slower project starts, although infrastructure and energy-related applications offer some offset.
Automotive adhesives—especially those associated with EV battery assembly and lightweighting—continue shifting demand toward higher-performance chemistries that, in some cases, still rely on solvent-based intermediates. Overall, the sector is expected to expand moderately in 2026, although formulators report cautious ordering and tighter working capital practices among customers.
Early discussions in the acetone market suggest that a U.S. plant could be rationalized if slow demand persists among both large end users and smaller buyers. Others expect producers to further reduce operating rates, especially given large buyer contracts or captive phenol-chain demand that limits shutdown flexibility.
Technical-grade IPA demand is expected to remain soft early in 2026. USP-grade demand is expected to hold steady, while electronic-grade consumption is anticipated to grow. ExxonMobil has announced plans to expand its Baton Rouge IPA unit to produce electronic-grade material to meet domestic chip manufacturing demand. Until that expansion is complete, the United States will continue to rely on imports from Taiwan and Japan.
Both the MEK and MIBK markets are expected to remain balanced for an extended period early in 2026. All MEK supplied to the U.S. is imported from overseas. New tariffs disrupted some trade flows in 2025: larger sellers passed through the increases with minimal impact, while imports from China and Brazil slowed. Brazilian imports may recover in 2026 after tariff reductions from 50 percent. Domestic MIBK operating rates may fall further due to new Chinese capacity, which has already reshaped spot markets in Asia and Europe. U.S. MIBK demand remained steady to slow in 2025 and is unlikely to improve in 2026.
Aromatic and aliphatic solvent markets are also expected to remain soft entering 2026. Toluene and mixed xylenes spot barge prices are likely to continue reflecting seasonal gasoline blending patterns, although solvent market volume is expected to remain flat. Aliphatic demand is also projected to remain steady, albeit slightly slower, through the first half of the year.
Some limited support could emerge from infrastructure activities, data center construction, energy-related projects, and stable public spending. However, with consumer demand soft and automotive and industrial end markets under pressure, overall solvent consumption is likely to remain muted.
Expect modest price volatility primarily tied to feedstock dynamics and logistics, while inventories remain comfortable until global industrial demand shows clearer signs of recovery—likely not until mid-2026 at the earliest.