Market Overview and Trends
The global petrochemical market size was valued at USD 584.50 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 7.0% from 2023 to 2030. The demand for the product is attributed to an increase in the demand for downstream products from various end-use industries such as construction, pharmaceuticals, and automotive, which is a major factor driving the growth.
Petrochemicals are vital components for many industrial processes and hence form the backbone of an industrial economy. Some of the products derived from petrochemicals include tires, industrial oil, detergents, plastics, etc. Basic plastic derived from the product acts as a building block in the manufacturing of consumer goods.
The industry is significantly affected by the prices of crude oil as it is a basic raw material used for the manufacturing of the product. The volatility in the prices and supply of crude oil has affected the production cost of petrochemicals, which, in turn, makes their production process costly.
Factors such as the growing inclination of consumers in developed and developing regions toward environment-friendly products and the volatile prices of raw materials of petrochemicals are likely to hamper the market growth in the coming years.
The steam cracking process is one of the most commonly used processes for manufacturing petrochemicals from natural gas or crude oil. In this process, ethane, a derivative of natural gas or naphtha that is predominantly derived from crude oil, is used for the manufacturing of olefins. A steam cracker has equipment operating at pressure from near-vacuum to 100 atm and operating at temperatures from 100 K to 1400 K.
Moreover, the demand for petrochemicals and their derivatives for use in various applications such as tires, pharmaceuticals, high-tech materials, and paints across the U.S. is led by unprecedented success in the exploration and production of shale gas.
The country is a major exporter of petrochemical products to Europe, as well as to countries such as China and India. There has been a significant resurgence in investments and petrochemical capacity expansions in the U.S. since 2014 owing to the reduction in feedstock prices and high demand for petrochemicals in aforementioned applications in the country.
Market Segmentation and Analysis
The global petrochemical market can be segmented by product, region, and end-use industry. By product, the market can be divided into ethylene, propylene, butadiene, benzene, xylene, toluene, methanol, and others. Ethylene accounted for the largest market share in 2022, owing to its wide application in the production of polyethylene, ethylene oxide, ethylene dichloride, and ethylbenzene.
By region, the market can be classified into North America, Europe, Asia Pacific, Latin America, and Middle East and Africa. Asia Pacific dominated the market in 2022, followed by North America and Europe.
The region is expected to witness the highest growth rate during the forecast period, due to the rapid industrialization, urbanization, and population growth in countries such as China, India, Japan, and South Korea. These countries are also major consumers and producers of petrochemicals and their derivatives.
By end-use industry, the market can be categorized into construction, automotive, packaging, electrical and electronics, healthcare, agriculture, and others. The construction industry was the largest end-user of petrochemicals in 2022, as the product is used in the manufacturing of various building materials such as pipes, insulation, flooring, roofing, adhesives, and sealants.
The automotive industry was the second-largest end-user of petrochemicals in 2022, as the product is used in the production of various components such as tires, fuel additives, lubricants, plastics, rubber, and synthetic fibers.
Market Competition and Strategies
The global petrochemical market is highly competitive and fragmented, with the presence of several large and small players. Some of the key players in the market include BASF SE, Sinopec Limited, ExxonMobil Corporation, Royal Dutch Shell plc, The Dow Chemical Company, LyondellBasell Industries N.V., Chevron Phillips Chemical Company LLC, Saudi Basic Industries Corporation (SABIC), INEOS Group Holdings S.A., and Total S.A.
These players adopt various strategies such as mergers and acquisitions, joint ventures, partnerships, expansions, investments, product launches, and research and development to gain a competitive edge and increase their market share. For instance, in September 2023, BASF SE announced that it had elected William F. Oplinger as its new President and Chief Executive Officer, succeeding Roy C. Harvey, who had served as the CEO since 2016.
BASF SE is one of the leading players in the petrochemical market, with a broad portfolio of high-quality basic chemicals and tailored specialties for internal and external customers. The company has a strong presence in various regions, with world-scale production facilities and leading process technology and operational excellence. The company also has capabilities for greenhouse gas emission reduction and circular feedstock, which contribute to its vision of reinventing the aluminum industry for a sustainable future.
Some of the major products offered by BASF SE in the petrochemical market include acrylic acid, benzene, butadiene, ethylene, ethylene oxide, oxo C4 alcohols, plasticizers, propylene, styrene, and superabsorbents. The company has a strong market position and competes with other players such as Sinopec Limited, ExxonMobil Corporation, and Royal Dutch Shell plc.
Market Outlook and Opportunities
The global petrochemical market is expected to witness a positive growth trend in the coming years, as the demand for the product and its derivatives is expected to increase from various end-use industries, especially in the emerging economies of Asia Pacific.
The market is also expected to benefit from technological advancements, innovation, and research and development activities in the industry, which aim to improve the efficiency, quality, and sustainability of the product and its production process.
Some of the opportunities for the market players include the development of bio-based and renewable petrochemicals, which can reduce the dependence on fossil fuels and lower the environmental impact of the industry.
Another opportunity is the adoption of digitalization and automation, which can enhance the productivity, safety, and profitability of the industry. Furthermore, the market players can leverage the potential of new applications and markets for petrochemicals, such as in the fields of biotechnology, nanotechnology, and smart materials.
