Global Petrochemicals Market to Expand at 6.8% CAGR due to the Expanding Global Industrial Sector
The global market for petrochemicals is a highly fragmented one, and is led by several multinational corporations all over the world. For expansion of their market share, the big multinationals strive to acquire smaller firms in the global petrochemicals market. Another key aspect that companies in the petrochemicals market focus on is expansion of their product portfolios.
The latest trend in the global petrochemicals market is the preference of manufacturers to establish production facilities in Asia Pacific. Supply of cheap labor and abundant supply of raw materials are the factors that support this trend in the global petrochemicals market. Growing at a 6.8% CAGR from 2014 to 2020, the global petrochemicals market is expected to reach US$885.07 billion by the end of the forecast period, from US$558.61 billion in 2013.
What are the Factors Driving the Global Petrochemicals Market?
Petrochemicals refer to chemicals that are derived from natural gas and crude oil. Petrochemicals are used extensively in the chemicals industry, since a wide range of chemical components are derived from these. The demand for petrochemicals is mainly driven by industrialization and most importantly the manufacturing sector.
A few of the other factors responsible for the robust growth of the global petrochemicals market are an abundant supply of raw materials in the Middle East, surging demand from end-use industries, and strong government support in Asia Pacific. The highest demand for petrochemicals comes from the following industries: packaging, construction, electronics, electrical, agriculture, and automotive.
The global petrochemicals market is segmented on the basis of product type and geography. On the basis of product, this market is categorized into methanol, styrene, vinyls, toluene, xylene, benzene, butadiene, propylene, and ethylene. With a market share of more than 25%, the global petrochemicals market was led by the market for ethylene in 2013. However, it is the market for propylene that is projected to expand robustly during the forecast period. Environmental concerns and the increasing preference for biobased components are factors that will hamper the demand for petrochemicals in the years to come.
Asia Pacific to Witness Robust Growth owing to Substantial Demand for Petrochemicals from China
Geographically, the global petrochemicals market is segmented into Latin America, Europe, North America, the Middle East, China, Africa, and Rest of the World. With a share of more than 25%, China emerged as a regional leader in the global petrochemicals market in 2013. Market trends suggest that in the forecasting horizon, the China petrochemicals market will be driven by high demand from the industrial segment in this region and greater government initiatives. Other regional markets in Asia Pacific cumulatively accounted for the second highest market share after China in 2013.
Surging demand for downstream products, especially in countries such as India, will further boost the Asia Pacific petrochemicals market over the next couple of years. Rapid capacity additions are responsible for the robust growth of the petrochemicals market in Africa and the Middle East. The emergence of shale gas and coal as the main feedstock for producing petrochemicals will prove to be gainful for the global petrochemicals market in the forecasting horizon.
The prominent companies operating in the global petrochemicals market are: China National Petroleum Corporation, INEOS AG, Chevron Corporation, British Petroleum plc, Royal Dutch Shell plc, and the Dow Chemical Company, amongst others.
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