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Petrochemicals Market Size, Share & COVID-19 Impact Analysis, By Type (Ethylene, Propylene, Methanol, Xylene, and Others), By End-Use Industry (Packaging, Electronics, Construction, Automotive, and Others), and Regional Forecast, 2023-2030

Region : Global | Format: PDF | Report ID: FBI102363

 

KEY MARKET INSIGHTS

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The global petrochemicals market size was valued at USD 599.68 billion in 2022 and is expected to grow from USD 627.84 billion in 2023 to USD 885.81 billion by 2030 at a CAGR of 5.0% during the forecast period.


Petrochemicals are chemical substances derived from crude oil, coal, and natural gas. Over the years, their definition has expanded to include a range of aliphatic, aromatic, and naphthenic organic chemicals. Products derived from petrochemicals, such as chemicals, plastics, and synthetic materials, have bolstered the market growth. These products are used in various end-use industries such as packaging, electronics, construction, and automotive industries. As these industries grow and evolve, the demand for petrochemical products is anticipated to increase.


COVID-19 IMPACT


Reduced Demand from Construction and Automotive Industries and Increased Usage of Consumer Goods Led to a Mixed Impact


The COVID-19 outbreak and the economic slowdown had a mixed impact on the market. During the early phases of the pandemic, demand for ethylene increased significantly due to a rise in demand from the packaging industry. This substantial increase in demand can be linked to increased consumption of consumer goods that employ polyethylene as a packaging material. In addition, the demand for polyethylene from food, sanitary products, and medical industries increased significantly over this period. On the other hand, the demand from construction and automotive industries demonstrated led to a sharp decline in the market owing to lockdown restrictions imposed by governments across the globe.


Moreover, the pandemic had a minor impact on bulk supply chains and prompted companies to reassess their manufacturing practices. The majority of companies could take the necessary measures to safeguard their employees and keep plants operational to provide the necessary chemicals to combat the pandemic. Despite the shutdown of a few plants in certain regions, industry players managed to weather the storm. Another notable event at the pandemic's peak was the falling of crude oil prices dramatically, putting oil-producing regions such as North America and the Middle East at a disadvantage.


However, it provided an opportunity for oil-importing countries such as South Korea, India, and China to establish strategic crude oil reserves for their businesses. Furthermore, the demand from end-use industries such as automotive and construction has begun to rebound as major economies recovered from the damages caused by COVID-19. Still, the emergence of new virus variants continues to create a high level of economic uncertainty.


PETROCHEMICALS MARKET TRENDS


Increasing Demand For Electrification and Energy Storage Systems to Bolster Market Growth


The electrification and energy storage systems require a variety of petrochemicals, such as ethylene, propylene, and benzene. The demand for energy storage systems is ramping up as they are used to store energy from renewable sources, such as solar and wind power. Petrochemicals are used to make the components of energy storage systems, such as batteries and capacitors. As the demand for energy storage systems increases, the advancement in this industry is expected to create opportunities for petrochemical-derived products.


The rising need for electrification and energy storage systems is anticipated to accelerate the expansion of the market significantly. The demand for innovative battery technology is expected to increase as the global shift toward electric vehicles and renewable energy sources gets traction. Moreover, petrochemical companies are expected to benefit from this trend because their products are critical in batteries. Petrochemical-derived materials are significantly used in key components such as cathodes, anodes, and electrolytes. As a result, expanding electrification and energy storage systems demand creates profitable prospects for companies to extend their market presence and capitalize on the growing demand for energy-efficient solutions.


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PETROCHEMICALS MARKET GROWTH FACTORS


Expanding Packaging Industry to Propel the Market Growth


The growing packaging industry is a significant market driver due to its prevalent reliance on petrochemical-derived materials, particularly plastics. The expansion of the packaging industry is profoundly related to rising global consumption and urbanization trends. As the urban population grows, so does the demand for packaged goods. Petrochemical-derived plastics provide a diverse range of cost-effective and versatile packaging materials, making them the preferred choice for industries ranging from food & beverages to personal care & consumer goods. The packaging industry’s ability to respond to increasing global consumption patterns largely bolsters the petrochemicals market growth.


Furthermore, e-commerce has transformed the packaging industry, with businesses seeking customized solutions that safeguard products throughout transportation and improve consumer experience. Petrochemical-derived plastics provide the adaptability required for producing packaging materials that meet the specific needs of various products and delivery methods. Plastics are useful in producing protective and visually pleasing packaging for the e-commerce sector since they are lightweight, robust, and cost-effective. As e-commerce continues to thrive, the packaging industry’s demand for petrochemical products is anticipated to rise during the forecast period.


The packaging industry’s pivotal role in catering to the demands of a rapidly urbanizing global population, its capacity for innovation and customization, its alignment with the evolving landscape of e-commerce, and its commitment to meeting health and hygiene standards have collectively fueled the demand for petrochemicals. As long as consumer lifestyles and market dynamics continue to drive the demand for packaged goods, the packaging industry’s reliance on petrochemicals, particularly plastics, is poised to remain important in shaping the market trajectory. 


 RESTRAINING FACTORS


Harmful Effects Caused by Petrochemical Products May Hinder Market Growth


Plastic pollution is currently one of the world's most challenging crises. It has been building up at an alarming rate in the oceans and is now nearly everywhere. The vast majority of plastics and polymers produced globally are based on petrochemicals.


The rising health and environmental concerns over hazardous products in daily life are expected to hamper market growth. Due to the availability of information, the number of environmentally conscious consumers across the globe is increasing. This is anticipated to encourage more industries to provide environmentally sound consumer products.


Moreover, microplastics, formed due to the breakdown of macroscopic plastics, have a wide range of environmental impacts. They contaminate the oceans and are ingested by aquatic creatures, resulting in higher amounts of these plastic particles entering our food chain. In collaboration with the private sector, governments and international organizations are establishing criteria and methodologies for assessing the environmental impacts of these products throughout their entire life cycle. This is anticipated to result in stricter health and environmental regulations limiting the use of hazardous petrochemical products. This, in turn, is expected to hinder market growth.


PETROCHEMICALS MARKET SEGMENTATION ANALYSIS


By Type Analysis


Ethylene Segment Dominated Due to Its Versatility


Based on type, the market is segmented into ethylene, propylene, methanol, xylene, and others.


The ethylene segment accounted for the largest share in 2022. This segment dominated the market due to its versatility and usage in producing polyethylene, ethylene glycol, and vinyl chloride. The increasing consumption of consumer goods, such as packaging materials and household items, bolsters the ethylene demand.


The propylene segment is expected to be the second fastest-growing during the forecast period owing to the growing demand for plastic manufacturing, such as polypropylene, which is widely used in consumer goods, automotive, and packaging goods. A propylene-derived product such as propylene glycol is used in various industrial products such as cosmetics, antifreeze, and pharmaceuticals.


Methanol demand is propelled by its consumption as a feedstock in producing formaldehyde, acetic acid, MTBE, and plastics. Formaldehyde is used in end-use industries such as adhesives, plastics, and resins. Moreover, MTBE is used as an octane booster in gasoline.


In addition, xylene is utilized to produce purified terephthalate acid, which is used to produce polyethylene terephthalate (PET), which in turn is a major component of bottles and synthetic fibers.


By End-Use Industry Analysis


Packaging Segment Dominated Due to Growing Consumer Goods Industry


In terms of end-use industry, the market is segmented into packaging, electronics, construction, automotive, and others.


The packaging segment accounted for the largest global petrochemicals market share in 2022. In packaging, the product demand is backed by the expanding consumer goods industry, rapid growth in e-commerce, and the need for lightweight and durable packaging materials. The rising demand for plastic packaging, especially in food and non-food packaging, is further propelling the segment growth.


Petrochemical-derived products, such as resins, plastics, and specialty chemicals, are vital for producing circuit boards, lightweight components, and other electronic parts. The global demand for electronic devices is growing rapidly due to increasing demand for smartphones, laptops, and other electronics. Hence, the electronics segment is expected to create significant opportunities for this market.


In the construction industry, the product is mostly used in pipes, adhesives, and coating for numerous applications, such as pipes, insulation, flooring, wiring, and structural components. The rising demand for infrastructure and growing demand for housing are further expected to bolster the product demand.


The automotive industry may witness a significant growth rate during the forecast period. The advantages of using intermediaries in the automobile industry include weight reduction, less fuel consumption, helping in pollution control, reduced assembling time, and ease of processing.


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REGIONAL PETROCHEMICALS MARKET ANALYSIS


Asia Pacific Petrochemicals Market Size, 2022 (USD Billion)

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The market size in Asia Pacific stood at USD 311.80 billion in 2022. As per the Association of Packaging and Processing Technologies, Asia Pacific’s packaging industry was expected to be valued at over 1.7 trillion units in 2022 and is projected to gain significant momentum due to rapid urbanization, increasing per capita consumption, and the booming e-commerce sector.


Moreover, China is the largest consumer of petrochemicals in the region. Today, the country’s perused self-sufficiency policy has made it the world’s largest chemical producer. Its self-sufficiency also allows the region to expand rapidly and gain a significant advantage over other economies. Rapidly growing electric mobility and the large presence of the traditional automotive industry are set to thrust consumption and propel the market in China.


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The technological advances in North America, particularly shale oil production by hydraulic fracturing, have driven the region's petroleum sector in the last decade. The oil & gas output has surpassed the domestic fuel demand in the region and investors are expected to increase their efforts on developing new production units. The availability of crude oil and the plan of multiple global chemical corporations to construct new or expand existing facilities in the region are expected to boost the regional growth significantly.


The U.S. held a dominant market share in the North America market in 2022 and is projected to maintain its dominance throughout the forecast period. The country is among the top 10 petrochemical producers generating significant demand from end-use industries such as automotive, construction, and paints & coatings. Moreover, increasing government initiatives toward recycling and sustainability are expected to fuel the demand for green petrochemical products in the region.


As per the data released by The European Chemical Industry Council in 2023, petrochemicals accounted for over one-fourth of the total European chemical market. In addition, Europe has a presence of prominent industries, including metal, automotive, and plastics. The European market is expected to grow steadily and is currently undergoing noteworthy structural changes due to rising energy and feedstock prices and increased competitive pressure from other countries. The Europe petrochemical sector is regulated due to concerns about health, environment, climate change, safety, and energy. As a result of these regulations, Europe's share in the global market is expected to decline during the forecast period. However, several large companies present in European countries have been investing in the green and digital transition of the chemical sector.


The market in South America is expected to grow at a below average rate during the forecast period owing to the poorly developed industries in the region. However, the rising demand for petrochemical-based products, including plastics, dyes, and thinners from the automotive and construction industries, is expected to support the market growth in the region. According to the International Monetary Fund, South America's economic growth is expected to slow down in 2023 to 1.6% compared to the previous year, with a growth rate of 4%. Moreover, countries such as Brazil and Argentina are expected to face an economic slowdown with an estimated growth rate of 1.5% to 2% till the midterm forecast.


According to the U.S. Energy Information Administration, Saudi Arabia is the second largest global oil producer. However, due to oil plant closures in Europe and a drop in Russian oil production, the Middle East is increasingly focusing on petrochemical projects over refineries. In addition, the Gulf countries are well equipped to meet the increasing demand due to an ample supply of raw materials, vast energy resources, and relatively lower costs than developed nations.


KEY INDUSTRY PLAYERS


Investing in New Technologies and Business Expansion is a Strategic Initiative Implemented by Companies


China National Petroleum Corporation, Shell plc, Dow Chemical Company, SABIC, BASF SE, and INEOS are some of the key producers operating in the market. Most players are involved in innovating and heavily investing in new technologies to meet growing demand from several end-use industries. For instance, Dow announced the plan to build the first net-zero carbon emissions integrated ethylene cracker and derivatives site. This new site will increase the company’s production capacity by 1.8 million metric tons through 2030.


Several players are also investing in research and development to enhance the production process and develop a sustainable solution. For instance, in 2022, BASF SE invested about USD 2.5 billion in research activities and personnel to develop sustainable solutions. At the same time, some companies are expanding their global reach through mergers and acquisitions. For instance, in 2022, Shell plc, which has a presence in more than 70 countries, supplied more than 12 million tonnes of petrochemicals to more than 1,000 industrial customers worldwide.


LIST OF KEY PLAYERS PROFILED IN PETROCHEMICALS MARKET:



  • BASF SE (Germany)

  • LyondellBasell Industries Holdings B.V. (Netherlands)

  • INEOS (U.K.)

  • Shell plc (U.K.)

  • SABIC (Saudi Arabia)

  • Reliance Industries Limited (India)

  • Mitsubishi Chemical Corporation. (Japan)

  • Dow Chemical Company (U.S.)

  • LG Chem (South Korea)

  • Chevron Phillips Chemical Company LLC. (U.S.)

  • China National Petroleum Corporation (China)

  • Maruzen Petrochemical Co., Ltd. (Japan)


KEY INDUSTRY DEVELOPMENTS:



  • August 2023 - INEOS formed a 50:50 joint venture with SINOPEC for the ethylene project at Tianjin Nangang, which is currently under construction by SINOPEC. The petrochemical project includes a 1.2 million tonnes per annum cracker and a new 500 kilo-tonnes per annum high-density polyethylene plant.

  • March 2023 – SABIC signed an agreement with Coolbrook to decarbonize ethylene production by assessing Coolbrook’s Roto Dynamic ReactorTM (RDR) technology. SABIC is committed to carbon neutrality by 2050 and a 20% reduction by 2030.

  • November 2022 - LyondellBasell announced that the company is evaluating the expansion of propylene production capacity at Channelview Complex near Houston, TX. The expansion would involve constructing a new propylene facility utilizing LyondellBasell's existing technology.

  • October 2022 - Shell USA, Inc. and Shell Midstream Partners, L.P. completed an agreement and plan of merger, under which Shell USA, Inc. acquired the common units representing limited partner interests in Shell Midstream Partners, L.P. not held by Shell USA, Inc. or its affiliates.

  • January 2022 - National Methanol Company, a joint venture between Celanese, Duke Energy, and SABIC, was certified as the first company for circular methanol production in the Middle East by International Sustainability and Carbon Certification (ISCC). The circular methanol is produced from one of SABIC’s captured CO2 UNITED plants.


REPORT COVERAGE


An Infographic Representation of Petrochemicals Market

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The research report provides a detailed market analysis and focuses on crucial aspects such as leading companies, types, and end-use industries. In addition, it provides quantitative data regarding volume and value, market analysis, research methodology for market data, insights into market trends and highlights vital industry developments and competitive landscape. In addition to the abovementioned factors, the report encompasses various factors that have contributed to the market growth in recent years.


Report Scope & Segmentation






















































ATTRIBUTE



DETAILS



Study Period



2019-2030



Base Year



2022



Estimated Year



2023



Forecast Period



2023-2030



Historical Period



2019-2021



Unit



Value (USD Billion) and Volume (Million Ton)



Growth Rate



CAGR of 5.0% during 2023-2030



Segmentation



By Type, End-Use Industry, and Geography



By Type




  • Ethylene

  • Propylene

  • Methanol

  • Xylene

  • Others



By End-Use Industry




  • Packaging

  • Electronics

  • Construction

  • Automotive

  • Others



By Geography




  • North America (By Type, By End-Use Industry, and By Country)

    • U.S. (By End-Use Industry)

    • Canada (By End-Use Industry)

    • Mexico (By End-Use Industry)



  • Europe (By Type, By End-Use Industry, and By Country)

    • Germany (By End-Use Industry)

    • U.K. (By End-Use Industry)

    • France (By End-Use Industry)

    • Italy (By End-Use Industry)

    • Spain (By End-Use Industry)

    • Rest of Europe (By End-Use Industry)



  • Asia Pacific (By Type, By End-Use Industry, and By Country)

    • China (By End-Use Industry)

    • India (By End-Use Industry)

    • Japan (By End-Use Industry)

    • South Korea (By End-Use Industry)

    • Rest of the Asia Pacific (By End-Use Industry)



  • South America (By Type, By End-Use Industry, and By Country)

    • Brazil (By End-Use Industry)

    • Rest of South America (By End-Use Industry)



  • Middle East & Africa (By Type, By End-Use Industry, and By Country)

    • South Africa (By End-Use Industry)

    • Saudi Arabia (By End-Use Industry)

    • Rest of the Middle East & Africa (By End-Use Industry)








Frequently Asked Questions

Fortune Business Insights says that the global market size was valued at USD 599.68 billion in 2022 and is projected to reach USD 885.81 billion by 2030.

In 2022, the market value in Asia Pacific stood at USD 311.80 billion.

Growing at a CAGR of 5.0%, the market is expected to exhibit rapid growth during the forecast period (2023-2030).

Based on end-use industry, the packaging segment led the market during the forecast period.

The growing packaging industry is expected to drive the market growth.

China held the largest share in the market in 2022.

China National Petroleum Corporation, Shell plc, Dow Chemical Company, SABIC, BASF SE, and INEOS are the leading players in the market.

The increasing demand for electrification and energy storage systems are anticipated to create new opportunities for the market.

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