The Petrochemicals Market is estimated to be valued at US$ 565.55 Bn in 2023 and is expected to exhibit a CAGR of 9.2% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Petrochemicals are basic and important organic raw materials used for the production of various end products like plastics, fibers, synthetic rubber, detergents, and other industrial goods. Petrochemicals are derived from petroleum refining and natural gas processing. They possess the advantages of being durable, lightweight, economical and easily moldable into various shapes and sizes as per requirement. This leads to their extensive use across end-use industries like packaging, automotive and construction material.
Market key trends:
The petrochemicals market is expected to grow at a significant rate, owing to rising demand from end-use industries like packaging, construction and automotive. Petrochemicals like polyethylene, polypropylene, ethylene glycol and methanol find wide applications in manufacturing plastics, fibers, resins and synthetic rubbers. plastic-based packaging is high in demand for food and beverage items and other consumer goods. Growth in the construction industry also boosts market for petrochemical derivatives like PVC and polycarbonate used for insulation, pipes, pipes and other construction materials. Additionally, increasing automotive production and demand for lightweight vehicles is propelling the usage of plastics in automotive industry. These factors are collectively contributing to driving volume growth in petrochemical markets over the forecast period.
Porter's Analysis
Threat of new entrants: The petrochemicals industry requires massive infrastructure investment and established distribution networks. This poses high entry barriers for new players.
Bargaining power of buyers: Buyers have moderate bargaining power due to the availability of substitutes. However, switching costs are high in certain segments like polymers.
Bargaining power of suppliers: A large number of integrated oil and gas producers supply key raw materials. This reduces suppliers' bargaining power.
Threat of new substitutes: Alternatives exist for certain applications but substitution threat is low due to performance advantages of petrochemical products.
Competitive rivalry: Major players compete on pricing, investment in capacity and new technologies resulting in intense competition.
SWOT Analysis
Strengths: Growing global demand and vast reserves of hydrocarbon feedstock provide a steady supply of raw materials.
Weaknesses: Vulnerability to fluctuation in crude oil prices and stringent environmental regulations increase compliance costs.
Opportunities: Rising energy needs in emerging economies offer scope for capacity expansion. Increasing plastics consumption in packaging and construction also present opportunities.
Threats: Development of bio-based substitutes and push for sustainable alternatives pose a threat over the long term. Trade wars and geopolitical instability impact supply chains.
Key Takeaways
The global Petrochemicals Market Share size was valued at US$ 565.55 Bn in 2023 and is expected to witness high growth, exhibiting a CAGR of 9.2% over the forecast period, due to increasing consumption of plastic products in packaging, construction and automotive industries.
Asia Pacific dominates the global petrochemicals market, with China being the leading consumer as well as producer. China accounts for over 50% of global petrochemicals demand on rising polymer needs of the country's burgeoning middle class. Regional growth will be further driven by expanding manufacturing activity in India.
Key players operating in the petrochemicals market are BASF, SABIC, TOTAL, Indian Oil Corporation Limited, Chevron Phillips Chemical Company, BP PLC, Sumitomo Chemical Company, Reliance Industries Limited, DowDuPont, Royal Dutch Shell. Major players are focusing on backward integration and expanding production capacities through investments and joint ventures to capitalize on rising Asian demand.
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