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. The petrochemical industry is a vital component of numerous industrial processes, as it provides raw materials for a wide array of products that find application in automotive, construction, and manufacturing. Some of the products derived from petrochemicals are tires, detergents, industrial oil, fertilizers, plastics, and medical devices. The basic chemicals and plastics derived from the petrochemicals act as a building block for numerous non-durable and durable consumer goods.
The top 15 petrochemicals market is expected to surpass 656.0 Mn Tons by the end of 2027 in terms of volume, exhibiting a CAGR of 4.1% during the forecast period (2021 to 2027).
Entry of new players is expected to drive growth of the top 15 petrochemicals market during the forecast period. The top 15 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 building 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 plastics are manufactured from oil & gas, the top 15 petrochemicals market is likely to witness an impressive growth rate in the upcoming years.
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.
Among regions, Asia Pacific held dominant position in the top 15 petrochemicals market in 2020, accounting for 58.2% market share in terms of volume, followed by North America. The petrochemicals market in Asia Pacific is estimated to continue to expand at a rapid pace during the forecast period. 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.
Figure 1. Top 15 Petrochemicals Market Volume (%), By Region, 2020
Reduction in free trade is expected to limit the growth of the top 15 petrochemicals market. Many developed and developing economies are considering imposing restrictions on free trade to boost their local economies. 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 U.S. 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 is expected to affect the provider/supplier relationships, thereby negatively affecting the market.
Top 15 Petrochemicals Market Report Coverage
|Base Year:||2020||Market Size in 2020:||497.1 Mn Tons|
|Historical Data for:||2017 - 2019||Forecast Period:||2020 to 2027|
|Forecast Period 2021 to 2027 CAGR:||4.1%||2027 Value Projection:||656.0 Mn Tons|
Chevron Phillips Chemical Company LLC, BASF SE, ExxonMobil, Shell Chemical Company, TotalEnergies SE, Sumitomo Chemical Co. Ltd., Reliance Industries Limited, Indian Oil Corporation, Bharat Petroleum Corporation Limited, and SABIC
|Restraints & Challenges:||
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.
Figure 2. Top 15 Petrochemicals Market – Opportunity Analysis
Petrochemical 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 feedstock from naphtha to ethane.
Figure 3. Top 15 Petrochemicals Market Volume (%), By Product Type, 2020
On the basis of product type, in 2020, the ethylene segment accounted for 32.0% of the volume share. This segment dominated the overall petrochemicals market in the year 2020 and is expected to continue its dominance over the forecast period. Ethylene finds wide application scope as a feedstock in the construction, packaging, and transportation sectors.
Top 15 Petrochemicals Market - Impact of Coronavirus (Covid-19) Pandemic
The outbreak of the novel COVID-19 pandemic had a strong impact on the growth of the top 15 petrochemicals market in 2020. Travel restrictions, dwindling prices of oil & gas, production cuts, and growing requirement for chemicals and refined products have hindered 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 top 15 petrochemicals market.
Key players operating in the top 15 petrochemicals market include Chevron Phillips Chemical Company LLC, BASF SE, ExxonMobil, Shell Chemical Company, TotalEnergies SE, Sumitomo Chemical Co. Ltd., Reliance Industries Limited, Indian Oil Corporation, Bharat Petroleum Corporation Limited, and SABIC.
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