Entry of New Players to Drive Petrochemicals Market
The petrochemicals market has witnessed an exponential growth over the past few decades, owing to the increasing demand from a range of end-use industries, including aerospace, building & construction, agriculture, food & beverage, electrical & electronics, healthcare, and automotive. However, in the current scenario, the mounting environmental concerns revolving around the production of petrochemicals has played a key role in transforming several manufacturing processes and other processes that primarily contribute to climate change. Moreover, as nearly 99% of the total plastic is manufactured from oil & gas, the global petrochemicals market is likely to witness an impressive growth rate in the upcoming years.
However, with increasing concerns pertaining to the use of plastic and its environmental impact, the demand for plastic products in several core industrial sectors has declined consistently. Thus, the growth of the global petrochemicals market is likely to slow down in the second half of the forecast period. Although a majority of the market players operating in the current petrochemical market landscape has consistently reported noteworthy profits, the overall market is currently transforming in a number of ways. The drop in crude oil prices over the past decade is one of the key factors that are likely to bolster the growth of the global market for petrochemicals.
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Several companies operating in the developing countries, including China, the Middle East, and Africa, and developed regions such as North America have made noteworthy profits due to the gas feedstock. Moreover, the demand from developing regions is likely to drop in the upcoming years due to which, several companies operating in the current petrochemical market landscape are expected to revise their value-creation strategies. At the back of these factors, along with a host of other drivers, the global petrochemicals market is projected to reach market value of US$ 676.5 Bn by the end of 2030.
Emerging Markets Witness Rise in Number of Petrochemicals Companies
Over the past few decades, the growth of the petrochemicals market has largely been driven by the growing demand from the developing regions. In addition, the increasing use of low-cost gas feedstocks as opposed to oil-based feedstock has largely benefited petrochemicals companies over the past few years– a trend that is expected to continue during the forecast period. The new shale gas-supply in North America has primarily profited companies in the region due to which, the market growth in North America is expected to remain consistent over the upcoming years.
As per current observations, consolidation in developed markets and rise in the number of new market entrants in developing regions are projected to drive the global petrochemicals market during the assessment period. A major share of the market can be attributed to national oil companies (NOC), international oil companies, and other companies with noteworthy petrochemical assets. Furthermore, investments in the petrochemicals market are largely being pumped by national oil companies due to the growing demand from the domestic market.
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Volume Demand to Drop amid COVID-19 Pandemic
The outbreak of the novel COVID-19 pandemic is expected to have a strong impact on the growth of the petrochemicals market in 2020. Travel restrictions, dwindling prices of oil & gas, production cuts, and growing requirement for chemicals and refined products are expected to hinder the growth of the market for petrochemicals in 2020. The ongoing efforts taken by various governments to curb the transmission of the novel coronavirus is projected to disrupt the overall supply-chain of various raw materials that are used across the petrochemicals market. In addition, restrained movement in the shipping industry and drastic decrease in the number of seaborne vessels have played a key role in hindering the growth of the global petrochemicals market. The market is anticipated to show signs of recovery toward the last quarter of 2020 and the first quarter of 2021, as air travel and cross-border activities are gradually expected to resume.
Petrochemicals Market: Overview
· Petrochemicals are an essential part of the chemical industry, as demand for synthetic materials is high across the globe. Petrochemicals are used in the manufacture of various products, which are employed in various end-use industries.
· Petrochemical products are extensively utilized in the manufacture of various materials, including paints, coatings, adhesives, and thermal insulation. These materials are employed widely in the building & construction sector.
· Petrochemicals are an essential part of commodities used in daily lives. Petrochemicals are chemical compounds derived from petroleum and other hydrocarbons, which are obtained from crude oil and natural gas. Petrochemicals are primarily used as chemical building blocks for a variety of materials and applications in the automotive sector.
Petrochemicals Market: Key Highlights
· New materials are often used as building blocks for product development and technology breakthroughs in the electrical & electronics industry. Modern electrical & electronics industry is highly dependent on petrochemical products for the manufacture of electrical and electronic goods. Everyday appliances such as CD players, telephones, radios, computers, and televisions are manufactured on a large scale with the assistance of the petrochemicals industry.
· Petrochemicals have become the most significant element in our daily lives and have entirely revolutionized the electronics sector by making some of the most important scientific inventions. The petrochemicals industry has proved to be extremely beneficial for the electronics industry.
· Automobile components made from petrochemicals products offer exceptional benefits such as lightweight that lead to less fuel consumption. This, in turn, helps in pollution control. Ease in processing helps in cutting down assembling time. The usage of petrochemicals enables to enhance the safety aspects of automobile.
· Properties such as flexibility in designing, lightweight, and durability have popularized the use of petrochemical composites in automobiles. Parts of the body, tires, interiors, dashboard, etc. are made out of petrochemical intermediates. The automobile industry has been transformed with the increase in usage of petrochemical-based composite materials.
Ethylene to Witness High Demand
· In terms of product, ethylene was the major segment with more than 25% share of the global petrochemicals market in 2019. It is estimated to continue its dominance in the global petrochemicals market between 2020 and 2030.
· Ethylene is primarily employed in the production of ethylene oxide, ethyl-benzene, and ethylene dichloride, which are used in building & construction and packaging industries
· Growth in production of methanol is directly associated to its increasing usage in olefins (MTO) and gasoline blending processes. Other petrochemicals such as butadiene, benzene, toluene, xylene, vinyls, and styrene also account for a vital share of the global petrochemicals market.
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Rise in Demand for Petrochemicals in Building & Construction Industry
· In terms of end-use industry, building & construction was the leading segment with more than 25% share of the global petrochemicals market in 2019. It is projected to continue its dominance between 2020 and 2030.
· Rapid growth in the building & construction industry is a key driver of the petrochemicals market. The number of new housings is on the rise in developing countries, indicating a positive overall trend in the construction sector.
Asia Pacific to Lead Petrochemicals Market
· In terms of volume, Asia Pacific constituted a prominent share of the global petrochemicals market in 2019
· The petrochemicals market in Asia Pacific is estimated to continue to expand at a rapid pace during the forecast period. The region held more than 50% share of the global petrochemicals market in 2019. Demand for petrochemical is high in Asia Pacific, particularly in China, owing to the increase in consumption of petrochemical products in the manufacture of various end-use products in applications such as automotive, building & construction, consumer & industrial goods, electrical & electronics, food & beverages, and healthcare in the region.
· China is a prominent consumer of petrochemicals in Asia Pacific. Expansion of the building & construction industry is a major factor propelling the petrochemicals market in the country. China is anticipated to remain highly lucrative country of the petrochemicals market during the forecast period, owing to the increase in production of electrical & electronics and plastic based products.