Petrochemicals Market Definition
The petrochemicals market consists of the sales of petrochemicals by entities (organizations, sole traders or partnerships) that produce acyclic (i.e., aliphatic) hydrocarbons such as ethylene, propylene, and butylene made from refined petroleum or liquid hydrocarbons and/or produce cyclic aromatic hydrocarbons such as benzene, toluene, styrene, xylene, ethyl benzene, and cumene made from refined petroleum or liquid hydrocarbons.
Petrochemicals are chemical products derived from petroleum. They are also called petroleum distillates. Some of the same chemical compounds as petrochemicals are also obtained from other fossil fuels, such as coal or natural gas, or renewable sources such as corn or sugar cane, but these are not included in the petrochemicals industry.
Petrochemicals Market Size
The global petrochemicals market reached a value of nearly $456.5 billion in 2019, having increased at a compound annual growth rate (CAGR) of 3.7% since 2015. The market is expected to decline from $456.5 billion in 2019 to $434.1 billion in 2020 at a compound annual growth rate (CAGR) of –4.9%. The decline is mainly due to lockdown and social distancing norms imposed by various countries and economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is expected to grow slightly from $430.96 billion in 2021 to $431.01 in 2023 at a CAGR of 0.01%. The market is expected to stabilize and reach $453.6 billion in 2025 and $506.1 billion in 2030.
Growth in the historic period resulted from economic growth in emerging markets, growth of the packaging industry, low interest rate environment, and global population growth. Factor that negatively affected growth in the historic period was stringent regulations.
Going forward, rising demand for polypropylene, and rising demand for synthetic materials will drive the growth. Factors that could hinder the growth of the petrochemicals market in the future include reduction in free trade, environmental concerns, covid-19, and oil price wars.
Petrochemicals Market Drivers
The key drivers of the petrochemicals market include:
Rising Demand For Polypropylene
Rising demand for polypropylene is expected to contribute to the growth of the petrochemicals market in the forecast period. Polypropylene is used in a wide range of applications including household products, automotive, and medical devices, among others. Superior mechanical properties and moldability make polypropylene a preferred material in manufacturing several products including automotive parts. Polypropylene is being increasingly used in Electric vehicles to neutralize battery weight. It is also used as an insulating material for high voltage carrying cables, and in the interior of the vehicles. It is estimated that by 2025, electric vehicles and hybrid electric vehicles will account for 30% of all vehicle salesi. Rising demand for e-vehicles is expected to boost the demand for polypropylene, which in turn will drive the market for petrochemicals in the forecast period.
Petrochemicals Market Restraints
The key restraints on the petrochemicals market include:
Reduction In Free Trade
Reduction in free trade is expected to limit the growth of the petrochemicals market during the historic period. Many developed and developing economies are considering imposing restrictions on free trade to boost their local economies. Brexit is likely to lead to increase in trade restrictions between the UK and other European countries. The petrochemical companies and their suppliers and customers are part of highly integrated European and global industry value chains, with complex supply chains involved in cross border trade within the EU and across the external European Union border. Also, the US government is expected to adopt a more protectionist stance, including renegotiating the North American Free Trade Agreement (NAFTA). These changes could set off a wider trade war and reverse the recent trend towards greater global free trade. Restrictions on movement of goods are expected to affect the provider/supplier relationships, thereby negatively affecting the market.
Petrochemicals Market Trends
Major trends influencing the petrochemicals market include:
Automation And Instrumentation Solutions
Petrochemical companies are increasingly using automation and instrumentation solutions to control the production process more effectively. Automation instruments include control valves, temperature transmitters, level transmitters, flow transmitters and pressure transmitters that help to improve an organizations operational efficiency. For example, Siemens process instrumentation and gas analytics solutions increases productivity and efficiency during plant operations.ii
On-Purpose Propylene Technology To More Efficiently Extract Propylene
Petrochemicals companies are adopting on-purpose propylene production technologies to produce propylene as a sole product but not as an alternate or co-product. On-purpose propylene technology refers to a modified version of traditional fluid catalytic cracking unit which increases propylene yield to 20% more than the actual output. Traditional sources for propylene which include steam crackers and oil refineries yield less propylene as a derivative or co-product due to the shift in feedstocks from naphtha to ethane. To meet the increased demand for propylene, petrochemical companies are investing to develop on-purpose technologies to accelerate the shortfall of propylene production. Major on-purpose technologies include propane dehydrogenation, methanol-to-olefins/methanol-to-propylene (MTO/MTP), high-severity fluidized catalytic cracking (HS-FCC), coal-to-olefins/coal-to-propylene (CTO/CTP) and gas-to-olefins (GTO). For Instance, major companies adopting this technology include, BASF, Dow Chemical, ExxonMobil Chemical and Sidi Kerir Petrochemicals Co. (SIDPEC).
Opportunities And Recommendations In The Petrochemicals Market
Opportunities – The top opportunities in the petrochemicals market segmented by type will arise in the ethylene segment, which will gain $3.00 billion of global annual sales by 2023. The top opportunities in the petrochemicals market segmented by end user industry will arise in the pharmaceuticals segment, which will gain $6.3 billion of global annual sales by 2023. The petrochemicals market size will gain the most in Nigeria at $1.14 billion.
Market-trend-based strategies for the petrochemicals market include investing in automation and instrumentation services, investing in developing on-purpose propylene technologies, implementing artificial intelligence in operations, investing in plastic recycling to deal with regulatory challenges, and investing in crude oil to chemical technologies. Player-adopted strategies in the petrochemicals market include expanding its business through sustainable investments, strengthening business both organically and non-organically, and strengthening its business through collaboration.
Recommendations – To take advantage of the opportunities, the business research company recommends the petrochemicals companies to use digital and advanced analytics, focus on developing crude oil to chemical technologies, expand in emerging markets, focus on capacity additions in low-cost countries, set up authorized distribution channel, provide flexible pricing, increase visibility through a high-performance website and focus on fast-growing end-use industries.
Petrochemicals Market Segmentation
The Petrochemical market is segmented by type, by application and by end-user.
By Type –
The petrochemical market can be segmented by type
The benzene market was the largest segment of the petrochemicals market segmented by type, accounting for 21.9% of the total in 2019. It was followed by ethylene, propylene, and others. Going forward, the ethylene segment is expected to be the fastest growing segment in the petrochemicals market, at a CAGR of 0.7%.
- a. Ethylene
- b. Propylene
- c. Benzene
- d. Xylene
- e. Styrene
- f. Toluene
- g. Cumene
- h. Others
By End-User –
The Petrochemical market are segmented by end-user into
The others market was the largest segment of the petrochemicals market segmented by end user industry, accounting for 33.3% of the total in 2019. Going forward, the pharmaceuticals segment is expected to be the fastest growing segment in the petrochemicals market, at a CAGR of 5.5%.
- a. Textile
- b. Furniture
- c. Paints And Coatings
- d. Pharmaceuticals
- e. Synthetic Rubber And Fibers
- f. Plastic Materials And Resins
- g. Toiletries And Cleaning Compounds
- h. Others
By Geography- The petrochemicals market is segmented into
- o North America
- o Western Europe
- o Asia Pacific
- Hong Kong
- New Zealand
- South Korea
- o Eastern Europe
- Czech Republic
- o South America
- o Middle East
- Saudi Arabia
- o Africa
- South Africa
Petrochemicals Competitive Landscape
Major Competitors are:
Other Competitors Include:
- • Royal Dutch Shell PLC
- • Saudi Basic Industries Corporation (SABIC)
- • The Dow Chemical Company
- • China Petroleum & Chemical Corporation (Sinopec)
- • LyondellBasell Industries N.V.
- • LG Chem Ltd.
- • Chevron Phillips Chemical Company LLC
- • INEOS Group Holdings S.A.
- • BASF SE
- • GS Caltex Corporation
- • Reliance Industries Limited
- • Supreme Petrochem Ltd
- • Finolex Industries Limited
- • INEOS Styrolution
- • Haldia Petrochemicals Ltd
- • Castrol
- • DCW Limited
- • Manali Petrochemicals Ltd
- • Nocil Limited
- • China Petrochemical Corporation (Sinopec Group)
- • China National Petroleum Corporation
- • China National Offshore Oil Corporation
- • Shell
- • Zhejiang Hengyi
- • Rongsheng Petrochemical
- • Idemitsu Kosan Co., Ltd
- • Keiyo Ethylene Co Ltd
- • Maruzen Petrochemical Co., Ltd.
- • Mitsubishi Chemical Corp
- • Mitsui Chemicals, Inc
- • Osaka Petrochemical Industries Ltd
- • Sumitomo Chemical Co., Ltd
- • Shell Chemicals
- • Versalis
- • Dow Chemical
- • Repsol
- • Borealis AG
- • BP plc
- • Cepsa
- • ExxonMobil Petroleum & Chemical
- • LyondellBasell
- • Total
- • Rosneft
- • SIBUR
- • Nizhnekamskneftekhim
- • LUKOIL
- • Gazprom
- • RusGazDobycha
- • PKN ORLEN
- • DuPont
- • DoW
- • LyondellBasell
- • Linde
- • Eastman Chemical
- • Huntsman Corporation
- • NOVA Chemicals Corporation
- • Imperial Oil Limited
- • Braskem
- • Dow Argentina
- • Petrobras Argentina
- • Oxiteno
- • Empresa Nacional del Petróleo (ENAP)
- • Saudi Aramco
- • ADNOC
- • Kuwait Petroleum Corporation
- • SABIC
- • Duqm Refinery & Petrochemical Industries
- • Sidi Kerir Petrochemicals Company (SIDPEC)
- • Carbon Holdings Limited
- • Sasol
- • Egyptian Petrochemicals Holding Company (ECHEM)