Westford, USA, Nov. 22, 2022 (GLOBE NEWSWIRE) -- Global petrochemicals market is expected to grow at a compound annual growth rate of 6.4% until 2028 as oil and gas prices remain elevated, while demand in key regions such as China and India continue to grow. The Asia Pacific region will be the most important for the petrochemicals market, with CAGR exceeding 10%. This is due to the increasing industrialization in China and India, which are projected to account for more than 35% of the global petrochemical market by 2028. North America is forecast to follow Asia Pacific growth at a CAGR of 6%, while Europe will see a CAGR of 4%.
SkyQuest expects that increased efficiency in the production process will lead to lower raw material costs, which in turn would result in higher product prices. In order to offset this cost increase, it is anticipated that large players such as BASF SE (BASF) and Dow Chemical Company (DOW) would expand their portfolio into new chemistries and regions. However, smaller companies may struggle to capitalize on these changes as they lack access to large capital expenditures or experienced management teams.
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Rapid Growth in Demand for Sustainable Petrochemicals is Compelling Manufacturers in Global Petrochemicals Market to Make Changes in Their Plan
Rapid growth of the market is primarily attributed to increasing demand for polyethylene, polypropylene and other materials used in manufacturing products such as plastics and resins. However, environmental concerns are also playing a role in increasing demand for greener petrochemicals.
One of the main ways that companies in the global petrochemicals market are seeking to reduce their carbon footprints is by using more sustainable petrochemicals. In particular, biobased petrochemicals are becoming increasingly popular. These products are made from plant-based sources such as biomass – which includes wood chips and agricultural waste – rather than oil or gas. Biobased petrochemicals offer several benefits, including reducing greenhouse gas emissions, improving quality control and reducing dependence on non-renewable resources.
Despite these benefits, there is still some resistance to switching over to more sustainable petrochemicals. One obstacle is cost: biobased products tend to be more expensive than traditional petrochemicals. Additionally, many manufacturers are still reluctant to switch over completely because they lack confidence in the long-term viability of biobased products. However, as awareness of the environmental benefits of green chemistry grows and prices for more sustainable products fall, there is likely to be even greater pressure on the industry to adopt more environmentally friendly production methods.
Economic Uncertainty and Global Trade Conflicts to Have a Negative Impact on Global Petrochemicals Market
The demand for synthetic materials is projected to grow by 8.3% a year throughout the forecast period, thanks in part to the expansion of the automotive and renewable energy industries. Over this period, SkyQuest expects the production value of petrochemicals to total $888 billion. The growth in automotive sales and surging renewable energy penetration are driving increased demand for synthetic materials in the global petrochemicals market. As new vehicles and renewable energy applications come on line, suppliers need to develop new processes and products that can meet these heightened demands.
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This growth is due to the increasing demand for plastics and other synthetic materials, as well as the expansion of the automotive and chemicals sectors. However, there are some challenges that the industry will face during this period. These include supply constraints from producers in key regions such as Iran and Venezuela, which have caused prices for key petrochemicals elements to increase significantly.
One area where the petrochemicals market is expected to see strong growth is polypropylene. This material is used in industrial applications such as packaging and product linings, and its demand is forecast to rise by 20%. SkyQuest also expects an increase in demand for ethylene oxide, propane gas, butadiene, styrene-butadiene rubber products, carbon black, ammonia and sodium hydroxide.
However, some uncertainty remains about how global trade will play out. For example, tension continues over steel and aluminum tariffs between the U.S. and key trading partners such as Canada and Europe. If these tariffs are not resolved soon, they could affect the cost of key raw materials used by petrochemical manufacturers in the global petrochemicals market. Nevertheless, most analysts believe that overall economic conditions will remain relatively supportive for petrochemicals over the next several years—although they do expect businesses to face intensifying competition from alternate sources of materials such as natural gas or even crowd-sourced manufacturing.
Asia Pacific Contributes Over 50% of Global Petrochemicals Market Revenue
According to research firm SkyQuest, the Asia Pacific region is the largest producer in the petrochemicals market in the world. The region accounted for 50.3% of global production in 2021, up from 33% in 2015. This is due to increasing demand from China and other Asia Pacific countries for petrochemical products. We expect this trend to continue, as the Asia Pacific region continues to grow economically and become more industrialized.
One reason that the Asia Pacific petrochemicals market is so prolific in producing petrochemicals is that many countries have strong mineral resources that can be used to create these products. Additionally, these countries have a large number of skilled workers who are able to handle chemical engineering and production processes. This broad base of expertise makes it easier for companies operating in the region to develop new products and expand their operations.
In terms of market dominance, Samsung Total Petrochemicals Co., Ltd remains one of the leading players in the Asia Pacific petrochemicals market. However, other major players such as ExxonMobil, Chevron, and Mitsubishi Chemical Corporation also operate significant businesses in this sector.
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Key Players in Global Petrochemicals Market
- BASF SE (Germany)
- Bayer AG(Germany)
- Biobest Group NV(Belgium)
- Certis USA L.L.C (US)
- Novozymes A/S (Denmark)
- Marrone Bio innovations (US)
- Syngenta AG (Switzerland)
- Nufarm (Australia)
- Som Phytopharma India Ltd (India)
- Valent Biosciences LLC. (US)
- BioWorks, Inc. (US)
- STK Bio-ag (Philippines)
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