LIGHT LINEAR ALPHA OLEFINS MARKET ANALYSIS

Linear alpha olefins, also known as alkenes, are straight, unsaturated organic compounds that contain at least one carbon-to-carbon double bond between first and second carbon atoms. Light Linear Alpha Olefins (LAOs) primarily constitute butene-1, hexene-1, and octene-1. Light LAOs are highly versatile feedstock for several commodities and end user products. The most common uses of these compounds are co-monomers in production of polyethylene, surfactants, alcohol and synthetic lubricants. Light LAOs are also used in drilling applications, alcohols, plasticizing agents, lubricants, synthetic acids, and pulp and paper industry.

Market Dynamics  

• A major driver promoting growth of the global light linear alpha olefins market is increasing plastic demand in various applications such as packaging and automobile. Light LAOs are primarily used as feedstock to manufacture plastics. For instance, according to The Federation of Indian Chambers of Commerce and Industry report 2017, plastic contributes 42% of the total packaging materials, whose current share is worth US$ 294 billion and is expected to reach US$ 450 billion by 2020.
• Increasing demand for automobiles will significantly rise demand for linear LAOs in the market during the forecast period. Plastics are extensively used in automobile industry to decrease the total weight of vehicle and hence, increase fuel efficiency. For instance, according to Automotive Mission Plan 2026, India automotive industry is expected to reach US$ 300 billion in 2026, which stood at US$ 74 billion in 2016. Such developments will increase plastic consumption, which will boost growth of the global light linear alpha olefins market.

Market Outlook

The Asia Pacific region is expected to remain the major consumer of Light LAOs due to expanding capacity of plastic manufacturing plants coupled with robust and increasing demand due to rapid urbanization. For instance, according to Turkish Plastics Industry Foundation report 2016, India and China contributed around 30% of the total global plastic production followed by USA, which contributed around 14.6% in 2016.

Key Players in the Global Light Linear Alpha Olefins Market

Major players operating in the global light linear alpha olefins market include Idemitsu Kosan Co., Ltd., Saudi Basic Industries Corporation, INEOS, Royal Dutch Shell plc, Chevron Phillips Chemical Company LLC, Sasol Limited, Linde AG, ExxonMobil Corp., Qatar Chemical Company Ltd., Nizhnekamskneftekhim, and Janex SA

Market Taxonomy

On the basis of product type, the global light linear alpha olefins market is segmented into:

• Butene-1 (C₄H₈)
• Hexene-1 (C₆H₁₂)
• Ocetene-1 (C₈H₁₆)

On the basis of application, the global light linear alpha olefins market is segmented into:

• Linear Low-density Polyethylene (LDPE)
• High-density Polyethylene (HDPE)
• Detergent
• Lubricant

On the basis of end-use industry, the global light linear alpha olefins market is segmented into:

• Packaging Industry
• Automotive Industry
• Chemical Industry
• Consumer Goods

On the basis of region, the global light linear alpha olefins market is segmented into:

• North America
  • U.S.
  • Canada
  • Mexico
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Europe
  • U.K.
  • Germany
  • Italy
  • France
  • Spain
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ASEAN
  • Australia

Key Developments:

• In August 2019, ExxonMobil Corporation announced its plans to enter the linear alpha olefins market by starting-up a new alpha-olefins facility at Baytown, Texas. The company plans to further integrate the linear alpha olefin plant to manufacture polyethylene from butane-1 and hexane-1 co-monomers. The plant is expected to come online by 2022 and will cater the growing alpha-olefins and polyethylene demand in North American region.
• In January 2019, Shell successfully completed the construction of the world’s largest alpha-olefins plant situated at Louisiana, USA petrochemicals manufacturing site. The new alpha-olefin plant with the production capacity of 425 kilo tons per year ramps up the total production capacity to 1300 kilo tons at Louisiana, USA. The expansion is a strategic move to support the company’s downstream chemicals operation by integrating it with the self-sustaining ecosystem.
• In January 2019, INEOS announced its plans to invest US$ 2 Billion, in collaboration with Saudi Aramco to build a new petrochemical facility in Jubail 2 Complex, Saudi Arabia. The petrochemical facility will include 425 kilo tons acrylonitrile plant and 400 kilo tons linear alpha-olefins plant. The facility is expected to come on-stream by 2025 and will supply raw materials mainly to poly-olefins manufacturers.