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Shift Towards Biological Hydrocarbons and Shale Gas as Key Feedstock Opens New Opportunities in Petrochemicals Production, states TMR

Posted on Aug 18, 2016

The global petrochemicals market is highly fragmented with no clear leader, says Transparency Market Research (TMR) in a new study. The top three players accounted for 20% of the market in 2013. A trend of large companies acquiring smaller, regional companies can be observed in the industry, states TMR. Another common trait among companies is the shifting of the manufacturing base to the emerging countries in Asia and the Middle East and Africa. Some of the leading players in this market include Shell, Sinopec, BASF SE, Mitsubishi Chemical, ExxonMobil, SABIC, and The Dow Chemical Company. 

Since the market is capital intensive, new players have to overcome high entry barriers. The procurement of raw materials at reasonable prices also becomes a major concern. Additionally, stringent environmental regulations by government authorities will make it difficult for new players to penetrate in the market. Thus, the threat of new entrants is expected to be low in the coming years.

High Demand for Petrochemicals from Construction Industry Benefits Market

Petrochemicals are required in the construction, automotive, chemicals, textiles, and packaging industry. High production capacities of these end use industries in China and India are resulting in a heightened demand for petrochemicals in these countries. Some of the key applications of petrochemicals in the construction industry are adhesives, resins, fibers, concrete, plastics, and repair. These applications are driving the growth of the petrochemicals market in China. Governments of various countries in Asia Pacific are introducing policies and initiatives that promote the growth of the petrochemicals market in the region.

Petrochemicals are also extensively used in automotive plastics as they increase the strength, flexibility, and durability of these materials. Petrochemicals such as benzene and polyethylene are used extensively in food packaging and preservation, pharmaceuticals, and transportation sectors. Since the Middle East is one of the key producers of crude oil, the abundant availability of raw materials in the region is driving the low cost production of petrochemicals products.

Environmental Hazards Associated with Petrochemicals to Challenge Market’s Growth

Environmental hazards and the price volatility associated with the use of synthetic-based petrochemicals are acting as major restraints for the market. In order to reduce dependability on petrochemicals, companies are focusing on the development of bio-based chemicals. Carbon dioxide emissions have increased owing to rapid industrialization in emerging nations. The International Energy Agency (IEA) has recommended all nations to cut down on their fossil-fuel subsidies and instead adopt energy efficient production methods. All these factors are expected to pose a threat to the growth of the petrochemicals market. 

Coal and Shale Gas Emerge as Key Feedstock for Petrochemicals Production

Although naphtha and natural gas have been key feedstocks for the petrochemicals market, of late there has been a shift towards biological hydrocarbons, coal and unconventional natural gas such as shale gas. This trend is especially growing in China and the U.S. Since China is the key producer of coal as well as petrochemicals, the coal-based petrochemicals market is expected to see a heightened growth in the coming years. Other countries are also increasing their focus on shale gas to avoid relying on natural resources such as crude oil and natural gas. Thus, a shift towards feedstocks such as coal and shale gas is emerging as a new opportunity in the market.

According to TMR, the global market opportunity in petrochemicals is expected to rise from US$635.93 bn in 2015 to US$885.07 bn by 2020. On the basis of product, the ethylene segment is expected to lead and account for 26.5% of the market by 2020. China led in the past and is expected to maintain its domination in the long term. China is expected to account for 29.1% of the global petrochemicals market by 2020, followed by the Rest of Asia.

This information is based on a report published by Transparency Market Research titled “Petrochemicals Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2014 - 2020.”

The global petrochemicals market is segmented as follows:

  • Product
    • Ethylene
      • Polyethylene
      • Ethylene oxide
      • Ethylene dichloride
      • Ethyl benzene
      • Other (including Alpha olefins and vinyl acetate)
    • Propylene
      • Polypropylene
      • Propylene oxide
      • Acrylonitrile
      • Cumene
      • Acrylic acid
      • Isopropanol
      • Other (including Polygas chemicals and oxo-chemicals)
    • Butadiene
      • Styrene-butadiene rubber
      • Butadiene rubber
      • Acrylonitrile butadiene styrene
      • Styrene-butadiene latex
      • Other (including Nitrile rubber and mechanical belts)
    • Benzene
      • Ethyl benzene
      • Cumene
      • Cyclohexane
      • Nitrobenzene
      • Alkyl benzene
      • Other (including Maleic anhydride)
    • Xylene
    • Toluene
      • Benzene
      • Xylenes
      • Solvents
      • Toluene diisocyanate
      • Other (including Pesticides, drugs and nitrotoluene)
    • Vinyls
    • Styrene
      • Polystyrene
      • Expandable polystyrene
      • Acrylonitrile butadiene styrene
      • Styrene-butadiene latex
      • Unsaturated polyester resins
      • Styrene-butadiene rubber
      • Other (including copolymer resins)
    • Methanol
      • Formaldehyde
      • Gasoline
      • Acetic acid
      • Methyl Tertiary Butyl Ether (MTBE)
      • Dimethyl ether
      • Methanol to olefins (MTO)
      • Other (including biodiesel, solvent and chloromethane)
  • Region
    • North America
    • Europe
    • China
    • Rest of Asia Pacific
    • Middle East & Africa
    • Latin America

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Transparency Market Research (TMR) is a market intelligence company, providing global business information reports and services. Our exclusive blend of quantitative forecasting and trends analysis provides forward-looking insight for thousands of decision makers. TMR’s experienced team of analysts, researchers, and consultants, use proprietary data sources and various tools and techniques to gather, and analyze information. Our business offerings represent the latest and the most reliable information indispensable for businesses to sustain a competitive edge.

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