by Market Overview:
Petrochemicals are basic organic compounds that are the building blocks for the production of a wide variety of end-use industrial and consumer products such as plastics, synthetic rubber, clothes, paints, and others. Crude oil and natural gas are the primary feedstocks used for producing petrochemicals through steam cracking and catalytic cracking processes.
Market Dynamics:
Shifting trends favoring shale gas in North America: Abundant supply of shale gas in the US through hydraulic fracturing has led to a surge in domestic natural gas production. Lower natural gas prices as compared to oil have prompted many commodity petrochemical producers to shift their feedstock from naphtha to gas. This has led to expansion of US ethylene and derivative capacities aimed at tapping the feedstock advantage.
Fluctuations in natural gas prices: Natural gas prices have exhibited significant volatility in the past few years influenced by seasonal supply-demand forces and geopolitical uncertainties. Spikes or sustained declines in gas prices can impact the choice of feedstock and undermine the competitiveness of existing capacities. This creates uncertainties for long-term capacity expansion plans of petrochemical makers relying majorly on gas.
The global Petrochemicals Market Share is estimated to be valued at US$ 584.50 Billion in 2023 and is expected to exhibit a CAGR of 7.0% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Key Trends:
The petrochemicals market has been witnessing rising demand from the packaging sector. There has been a rise in consumption of petrochemicals for production of plastics, polymers, and resins that find extensive applications in the packaging of food and beverages, pharmaceuticals, personal care & cosmetics, and other consumer goods. The growth in e-commerce coupled with rising preference for packaged goods has increased the use of plastics for packaging. Furthermore, continuous R&D in the petrochemicals sector has led to the development of bio-based and recyclable petrochemical products, which is also supporting the market growth.
SWOT Analysis
Strengths: The petrochemical industry provides basic chemicals required for various industrial and consumer applications. Growing economies and rising population demand is driving the petrochemical market.
Weaknesses: Volatility in crude oil prices affects the profitability of petrochemical companies. Stringent environmental regulations regarding emissions may increase compliance costs.
Opportunities: Emerging applications in areas such as healthcare, transportation, and renewable energy sources open up new growth avenues. Recycling of plastics helps reduce dependence on crude oil.
Threats: Substitution threat from bio-based chemicals. Trade wars and geopolitical tensions can disrupt supply chains.
Key Takeaways
The global petrochemicals market size was valued at USD 584.50 billion in 2023. It is expected to reach over USD 1 trillion by 2030, expanding at a CAGR of 7.0% during the forecast period. Growth in the packaging industry coupled with rise in the midstream petrochemical products are majorly driving the market.
Regional analysis: Asia Pacific dominates the global petrochemicals market due to presence of large consumer base and manufacturing hub in countries such as China, India, Japan and South Korea. The region accounts for over 50% of global demand and the trend is expected to continue in the coming years.
Key players analysis: Key players operating in the petrochemicals market are BASF SE, Sinopec Limited, ExxonMobil, The Dow Chemical Company, Shell Chemical Company, SABIC, LyondellBasell Industries, Total S.A., Sumitomo Chemical Co. Ltd., Chevron Phillips Chemical Company LLC and E. I. du Pont de Nemours and SNPC, INEOS, and Reliance Industries. The major players are focusing on expansion of production facilities and backwards integration to strengthen their position.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemicals and materials, defense and aerospace, consumer goods, etc.
