Petrochemicals play an important role in the 21st century lifestyle and are utilized in various end use industries. The oil & gas Industry provides the feedstock in the form of crude oil, natural gas and their derivatives. Different kinds of processes employed on crude oil, and natural gas yield different products. The most sought-after product is ethylene, which holds a 25% market share in the global petrochemicals market. It is used as a feedstock for manufacture of polyethylene, polystyrene, ethylene glycol and ethanol. Ethylene is followed by benzene, propylene, xylene, butadiene in terms of market share. Some petrochemicals are used widely around the world in various application includes dyes, detergents, paint, plastic, rubber, textiles and fertilizers. The major drivers are the high dependency and lack of large scale alternatives to petrochemical products. The major competitor to petrochemicals are bio-based chemicals and as environmental consciousness increases, investment in bio-based chemicals is likely to escalate. In addition oil price instability also affects growth.

Top 15 Petrochemicals Market Taxonomy

On basis of type of Petrochemical

  • Ethylene
  • Propylene
  • Benzene
  • Butadiene
  • Xylenes
  • Toluene

On basis of type of Intermediate Chemicals

  • Methanol
  • Ethylene Oxide
  • Propylene Oxide

On basis of type of polymer

  • Polyethylene (PE)
  • Polypropylene (PP)
  • Polystyrene (PS)
  • Polyester (PET)
  • Polyvinyl chloride (PVC)
  • Acrylonitrile butadiene styrene (ABS)

On basis of End User Industry

  • Packaging
  • Automobile
  • Construction
  • Electrical & Electronics
  • Aviation
  • Consumer Goods
  • Others

Ethylene, propylene are the most dominant chemicals in terms of market share, and are major feedstock for the manufacture of polyethylene, polypropylene and polypropylene oxide. Xylene is projected to be the fastest growing petrochemical market due to demand for polyester fibers.  Furthermore, chemicals such as methanol, ethylene oxide and propylene oxide are used as reaction intermediates for light olefins, ethylene glycol, and polyurethane plastics respectively. Moreover, ethylene Oxide is also used as a fumigant and disinfectant.  All the end user industries are majorly dependent on polymers with polystyrene being the most widely used. PVC is commonly used for pipes, furniture, and flooring application; and polyethylene for plastic bottles to consume edible and non-edible liquids.

The packaging industry is the largest end use market of petrochemicals. As the disposable incomes in the developing world rise, consumer demand for packaged materials rises as they seek quality assurance. The packaging industry is directly affected by consumerism. Other end use industries such as automobile, construction, electrical and consumer goods require petrochemicals for product manufacture, and the healthy growth of these industries directly affect petrochemical market growth.

Top 15 Petrochemicals Market Outlook - Surging demand in Asia-Pacific Augmenting Market Growth

  • Asia Pacific market is a major processing hub for petrochemicals with India, China, and South Korea being major drivers. Six of the world’s ten largest refineries are in Asia Pacific with the largest being Reliance owned Jamnagar Refinery. This region has recently observed an upturn in consumption due to increased population. China has also claimed to have the world’s largest shale reserves but is unable to develop them due to water shortages. Technological Advancement in shale gas extraction is expected to complement growth.
  • North America is a major processing hub. Feedstock is obtained from shale gas produced in the various US shale plays (Marcellus, Eagle-Ford, Permian, Barnett, Bakken and Niobrara). In addition, it is also one of the largest consumer of petrochemicals. Also, Middle East and North Africa are major sources of crude oil. There is also a significant presence of petrochemical industry in this region due to close proximity to crude oil source.
  • Europe is a consumer market for petrochemicals with heavy dependency on North American and Asian markets. A west to east shift has been observed in the petrochemical market. Maturation in Europe has led to shifting of existing petrochemical infrastructure to countries such as India where labor is cheap.
  • The growth focus is shifting to low cost feedstock availability such as CTO (Coal to Olefin), MTO (Methanol to Olefin), Shale Gas, Coal Bed Methane and bio feedstock to produce ethylene and propylene. These are considered as alternative processes for ethylene and propylene production. China has announced six CTO projects having total ethylene capacity of 1.62m tons/year.

Key Developments-

  • In July 2019, Exxon Mobil Corporation completed expansion of its petrochemical plant based in Texas, U.S. The expansion increased the plant capacity by 6, 50,000 tons per years taking the total capacity 1.7 million tons per year. The expansion will help company to meet increasing demand for polyethylene.
  • In March 2019, Saudi Aramco acquired 70% stake in Saudi Basic Industries Corporation (SABIC). The acquisition is in line with Aramco’s strategy to invest in refining and petrochemicals for securing new markets for its crude oil and natural gas.
  • In October 2018, Saudi International Petrochemical Co. acquired Sahara Petrochemical Co. These will help Saudi International Petrochemical Co. to increase its presence in Saudi Arabia and global petrochemicals market.
  • In January 2019, Lotte BP Chemical Company Limited (JV between BP plc. and Lotte Corporation) announced expansion of its petrochemical plant based in Ulsan, South Korea. The expansion will increase capacity of acetic acid from 5,50,000 tons per year to 6,50,000 tons per year by end of 2019 and double production capacity of vinyl acetate monomer from 2,00,000 tons per year to 4,00,000 tons per year by end of 2020.
  • In June 2019, Qatar Petroleum entered into a partnership with Chevron Phillips Chemical (JV between Chevron Corporation and Phillips 66) to build a new petrochemical plant in Doha, Qatar. The plant will have an ethane cracker with annual ethylene production capacity of 1.9 million tones and will be completed by 2025. The new plant will help Qatar Petroleum to enter into petrochemicals market.

The major players in the Petrochemical Industry are BASF SE, ExxonMobil, The Dow Chemical Company, Shell Chemical Company, SABIC, Sinopec Limited, Lyondell Basell Industries, Total S.A., Sumitomo Chemical Co. Ltd., Chevron Phillips Chemical Company LLC and E. I. du Pont de Nemours and Company.


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