Petrochemicals Market

Global Petrochemicals Market: Highlights

• In terms of value, the global petrochemicals market is anticipated to expand at a CAGR over 4.0% from 2019 to 2027, and surpass the value of US$ 7 trillion by 2027.
• The prominence of petrochemicals is estimated to expand at a robust pace in the next decade. Petrochemicals have been a crucial driver of global oil demand in the past decade. As per the projections by the International Energy Agency (IEA), petrochemicals are likely to contribute to over a third of the growth in oil demand by 2030.
• China and The Middle East are likely to contour the future of petrochemicals market. Integration of fuels and chemicals production are likely to impact the economics of the downstream industry during forecast period. For instance, over 60% of expected investment in Chinese projects is in integrated capacity.
• GCC petrochemical investments in 2019 exceeded US$ 140 Bn. A new era in industrial diversification is underway in Saudi Arabia with downstream growth figuring prominently. GCC producers are altering their refining and petrochemicals portfolios, with a focus on enhanced integration throughout the downstream value chain.
• Of late, the switch to lighter chemical feedstocks has impacted the production of C4 chemicals and aromatics including: benzene, butadiene, and paraxylene. Several crude-oil-to-chemicals complexes are coming up in China by 2022 which are expected to focus heavily on producing aromatics.

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Global Petrochemicals Market: Key Drivers and Restraints

• Petrochemical producers are increasingly diversifying their portfolios, investing in new products and moving away from traditional commodity polymers towards specialties such as engineering plastics and elastomers.
• With continued volatility in oil prices and the benefits from cheap feedstocks declining, petrochemical producers have had to explore new strategies and opportunities. As a result, they are likely to transition towards higher margin value added specialty chemicals during forecast period. 
• The implementation of IMO bunker fuel regulations is expected to cast deeper impacts on the demand of petrochemicals by 2027.
• Factors such as vehicle electrification and increased fuel efficiencies in new vehicles are likely to decrease petrochemical fuel demand. The strengthening regulatory frameworks by the governments across the globe to increase vehicle fuel efficiency and reduce carbon dioxide emissions are likely to pose significant challenges to global petrochemicals consumption by 2027.
• Significant rise in the environmental issues is predicted to restrict the growth of the petrochemicals market in the near future. In addition to this, the increasing shift towards the development of the bio-based chemicals is another key factor projected to hamper the growth of the market in the coming years. Nevertheless, the rising use of coal and shale gas as one of the key feedstock for the production of petrochemicals is expected to encourage the growth of the global market in the next few years.

Global Petrochemicals Market: Key Segments

• Based on product, the global petrochemicals market is broadly segregated into: ethylene, propylene, butadiene, benzene, xylene, toluene, vinyls, styrene and methanol
• Ethylene is one of the largest-volume petrochemicals worldwide. Polyethylene, and ethylene oxide were the two largest outlets for ethylene in 2018, and are anticipated to follow the similar trend throughout the forecast period. Rise in demand for polyethylene is expected to be a key factor driving the demand ethylene by 2027. Ethylene oxide accounted for nearly 15% of the ethylene market in 2018.
• Propylene is an important raw material for the production of organic chemicals such as polypropylene, acrylonitrile, propylene oxide, and oxo-alcohols. Demand for propylene is likely to expand at a CAGR close to 5% from 2019 to 2027.
• Demand for C4 chemicals and aromatics segments such as benzene, xylene, and toluene is estimated to expand substantially during forecast period.

Asia Pacific Expected to be a Highly Lucrative Region of Global Petrochemicals market

• In terms of value and volume, Asia Pacific constituted a major share of the global petrochemicals market in 2018 and the trend is projected to continue during the forecast period
• Uncertainties brought about by an escalating trade dispute between the US and China, as well as economic and security concerns in certain regions, have cast a shadow over the global economy.
• However, China alone is projected to account for a large share of new petrochemicals demand anticipated through 2027.
• Middle East is expected to remain the low cost regime in the Industry 4.0 era for key petrochemicals. As per Saudi Vision – 2030, Saudi Arabia aims to reduce its reliance on oil and diversify its economy, which is believed to be a crucial opportunity to invest in domestic petrochemicals business.

Global Petrochemicals market: Competition Landscape

• Major players operating in the global petrochemicals market include:
  • BASF SE
  • Shell Chemical Company
  • DuPont
  • Total S.A.
  • ExxonMobil
  • Sinopec Limited
  • Saudi Arabian Oil Co.
  • Sumitomo Chemical Co. Ltd.
  • Dow Inc.
  • Chevron Phillips Chemical Company LLC
  • LyondellBasell Industries.
• The global petrochemicals market was highly fragmented in 2018 and the trend is projected to continue throughout the forecast period. The role of fostering partnerships across the entire value chain is likely to enhance the competitiveness of the global petrochemical market in the near future.