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(Publishing-NewsWire.com, November 15, 2021 ) Petrochemicals market size is forecast to reach US$575.1 billion by 2026, after growing at a CAGR of 4.1% during 2021-2026. Petrochemicals are a set of chemical compounds derived from different chemicals such as hydrocarbon liquids. They are also obtained from different sources such as petroleum, natural gas, coal, and coke among others. Petrochemical companies follow fluid catalytic cracking (FCC) process to manufacture different petrochemical products. The petrochemical industry plays an important role in the economic growth and development of the manufacturing sector. The flourishing industrial and manufacturing sector is the prime growth driver of the petrochemicals market. The growing demand from end-use industries such as aerospace, automotive, construction, and healthcare among others is supporting the market growth between the forecast period. Also, easy availability of raw materials and favorable regulatory policies are anticipated to play a key role in driving the petrochemicals market during the forecast period. However, the increasing environmental concerns over the usage of petrochemicals along with the fluctuating raw material prices are likely to hamper the market growth during the forecast period.
The COVID-19 pandemic is crippling different industries; one of the few industries that were largely hit to some extent was the chemical industry. Due to the Covid-19, the construction and automotive industry is impacted very badly which further affected the petrochemical industry. The automotive and construction industries are the major end-users of petrochemical products. However, demand from packaging and medical applications is helping the industry positively. The drop in oil prices is one of the major factors negatively impacting the prices of petrochemical materials. The covid-19 impacted the global supply chain of the petrochemicals market. The slowdown in the shipping industry and the drastic decrease in the number of seaborne vessels are the key challenges in the global market.Petrochemicals market size is forecast to reach US$575.1 billion by 2026, after growing at a CAGR of 4.1% during 2021-2026. Petrochemicals are a set of chemical compounds derived from different chemicals such as hydrocarbon liquids. They are also obtained from different sources such as petroleum, natural gas, coal, and coke among others. Petrochemical companies follow fluid catalytic cracking (FCC) process to manufacture different petrochemical products. The petrochemical industry plays an important role in the economic growth and development of the manufacturing sector. The flourishing industrial and manufacturing sector is the prime growth driver of the petrochemicals market. The growing demand from end-use industries such as aerospace, automotive, construction, and healthcare among others is supporting the market growth between the forecast period. Also, easy availability of raw materials and favorable regulatory policies are anticipated to play a key role in driving the petrochemicals market during the forecast period. However, the increasing environmental concerns over the usage of petrochemicals along with the fluctuating raw material prices are likely to hamper the market growth during the forecast period.
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Petrochemicals Market Segment Analysis - By Type
Based on the type analysis, the market is categorized into olefins, aromatics, and methanol. The ethylene segment of olefins will be the dominating type in the global market and is estimated to grow at a significant CAGR of 3.8% during the forecast period. Ethylene is widely used in the synthesis of various derivatives such as ethylene oxide, ethylbenzene, and ethyl dichloride. These derivatives are majorly preferred in the construction, and packaging industries. The growing demand for lightweight plastics and lightweight components in the automotive sector is positively supporting the ethylene type. Ethylene is a primary compound used for manufacturing plastic. They are extensively used to develop food packaging, bottles, bags, and other plastics-based goods. The propylene segment will register a significant share during the forecast period, owing to its superior mechanical properties and moldability. Injection-molded polypropylene is extensively used in the electronics manufacturing industry. Propylene finds its applications in housewares, bottle caps, toys, and luggage among others. Propylene is used in making acrylics, rubbing alcohol, epoxy glue, and carpets among others.
Petrochemicals Market Segment Analysis - By End-Use Industry
Based on the end-use industry, the market is segmented into packaging, transportation, building & construction, electrical & electronics, medical & healthcare, and food & beverage among others. The building & construction segment accounted for 25% of the market share in 2020 and is estimated to grow significantly during the forecast period. The rapid growth in construction activities in emerging economies are driving the market growth Growing preference for modern paints & coatings among builders is boosting the market growth. According to the data published by U.S. Census Bureau, construction spending in 2019 topped US$1.3 trillion. The Indian government allocated approximately US$24.27 billion in the Union budget 2020-2021 for the development of transport infrastructure. The automotive and aerospace segments also hold a significant share in the global market. The modern automobile industry is highly dependent on petrochemicals for developing and manufacturing modern and efficient vehicles. The significant properties such as flexibility, lightweight, and durability are driving the usage of petrochemicals in the automotive industry. The chemicals offer various advantages in the automotive industry including, reduction in vehicle weight, fuel-efficient, low pollution rate, high safety, and cutting down assembly time among others. Petrochemical composites are used in body parts, tires, interiors, and dashboards.
Petrochemicals Market Segment Analysis - By Geography
Asia Pacific region held the largest share in the petrochemicals market in 2020 up to 50%, owing to the rapid growth in the infrastructural and automotive sector in the region. Rapid industrialization along with the presence of developing nations in the region are also supporting the market growth for petrochemicals. Reliance Industries Ltd, China Petrochemical Corp, and Indian Oil Corp Ltd are the top three companies involved in the production of petrochemicals in the region. Based on the research analysis China and India are two the major countries that occupy the maximum share in petrochemicals production. According to the Department of Chemicals & Petrochemicals of India, the demand for plastics in India is growing at an average rate of 8.9%. It is also expected to reach 24 Million Ton by 2022-23 and 35 Million Ton by 2027-28. They also mentioned that there are approximately 50,000 processing units with 1,53,500 plastics processing machines in India.
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Petrochemicals Market Drivers:
Growing demand from the automotive industry
The usage of petrochemical products among the automotive and construction sectors are increasing gradually due to their mechanical properties. Automotive manufacturers are adopting advanced components in vehicle manufacturing. The automotive industry is constantly using innovative materials to reduce vehicle weight and achieve better fuel efficiency. Approximately 10% reduction in total vehicle weight can improve fuel economy by 6%-8%. Iron and steel are replaced by polymer and composite materials in the automotive sector which is further supporting the market growth. Ethylene and polypropylene are used for manufacturing different components in the automotive industry. Polypropylene is used for neutralizing battery weight in electrical vehicles and is also used as an insulating material in interior designing use. The significant growth in automotive and construction industries across the Asia Pacific, Europe, and North America is positively impacting the market. According to a research paper, in 2020 approximately 71 million motor vehicles were manufactured globally. China occupied 1st position in the global passenger car manufacturing and manufactured approximately 21 million passenger cars in 2020. The European Union exported EU 110 billion worth of passenger cars between January and November 2020.
Growing usage of plastics
99% of all plastics are developed from oil and natural gases. Naphtha is one of the most important of all the petrochemicals used in the production of plastics. Other petrochemicals such as ethylene, propylene are also used in the manufacturing process of plastics. The changing lifestyle along with the growing demand for packaged goods are driving the market for plastics. Plastics is a versatile, lightweight, flexible, and highly durable material used among different industry verticals. According to the PlasticsEurope analysis, the global plastics production reached 360 million tonnes in 2018 and the European plastics production reached 62 million tonnes. In 2018 China occupied approximately 30% of the world's plastics production.
Petrochemicals Market Challenges:
Growing environmental concerns
The petrochemical industry is one of the prominent industry plays a vital role in various manufacturing sectors. However, petrochemicals release various chemical gases during the manufacturing process. These gases release a high quantity of toxic substances into the environment and polluting nature. The petrochemical industry is the major source of the greenhouse gases responsible for global warming. These chemicals are also responsible for ozone layer depletion, acid rain, and air pollution.
Petrochemicals Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the petrochemicals market. Major players in the petrochemicals market are BASF SE, Petro China Company Limited, Total S.A, DuPont de Nemours, Inc, Saudi Arabian Oil Co, Exxon Mobil Corp, Chevron Phillips Chemical Company, China Petroleum & Chemical Corporation., Mitsubishi Chemical Corporation, Sumitomo Chemical Co., Ltd., INEOS, Dow, and LyondellBasell Industries NV among others
In February 2021, INEOS acquired BP’s global Aromatics & Acetyls business for USD 5 billion.
In 2019, China National Petroleum Corporation signed an agreement with the Benin government to construct a pipeline from Niger to Benin.
The Asia Pacific region will lead the petrochemicals market during the forecast period, owing to the increasing demand from construction and automotive industries. China is expected to be the prominent consumer in the region.
Petrochemicals help automobile manufacturers to develop lightweight components. These components developed from petrochemicals offer various properties such as durability, and high strength among others. This, in turn, helps in pollution control. The usage of petrochemicals enables the enhancement of the safety aspects of automobiles.
Furthermore, the development of advanced and new technologies such as light crude and mixed crude is also driving the market growth.
Petrochemicals are obtained from crude oil and natural gas. They are widely preferred as chemical building blocks in different applications.
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