Enjoy complimentary customisation on priority with our Enterprise License!
The global naphtha market is projected to reach a value of USD 260.87 billion in 2027, at a CAGR of 4.05% between 2023 and 2027. The naphtha market refers to the global trade and consumption of naphtha, a flammable liquid hydrocarbons mixture. It is commonly used as a feedstock in the petrochemical industry for producing plastics, chemicals, and synthetic fibers.
Analysis Period | 2017-2027 |
Market Size (2017) Historic Year | USD 194.35 billion |
Market Size (2027) - Forecasted Year | USD 260.87 billion |
Historic Opportunity (2017-2021) | USD 12.70 billion |
Historic CAGR | 1.60 % |
Forecasted Opportunity (2023-2027) | USD 47.01 billion |
Market Opportunity Transformation Growth | 34.23 % |
Market Opportunity Capitalization | USD 59.71 billion |
The petrochemical industry is the largest consumer of naphtha, accounting for around 75% of total demand. The demand for light naphtha, which is used as a feedstock in gasoline production, is expected to grow. Asia-Pacific region dominates the market in terms of production and consumption. Asia-Pacific region dominates the naphtha industry, with over 31% market share. The price is influenced by factors such as crude oil prices, supply and demand dynamics, and geopolitical events. It can be produced from various sources including crude oil refining, natural gas processing, and coal-to-chemicals technology.
The increase in demand in the petrochemical industry is notably driving market growth. A vital feedstock for the production of many petrochemicals, including olefins, aromatics, and other chemicals. The petrochemical industry's explosive expansion is one of the main causes of the increase in demand for naphtha. As more nations around the world are relying on petrochemical products, demand for them has grown exponentially in recent years. The petrochemical sector has therefore been increasing its production capabilities, which has resulted in a corresponding rise in demand.
The petrochemical sector's transition to lighter feedstocks is another factor boosting demand. It is an easy-to-use replacement for heavier feedstocks like crude oil or liquefied petroleum gas (LPG) petroleum products as it typically has a higher boiling point than lighter feedstocks like ethane or propane. Additionally, it is a more cost-effective feedstock for the petrochemical industry than crude oil because it produces more chemicals per barrel. The rising demand for plastics and other polymers has also contributed to the rise in demand. Thus, the abovementioned factors are expected to drive the growth of the global market during the projection years.
Stringent regulations on the usage is the major challenges impeding market expansion. A common feedstock for many industrial processes, including the creation of chemicals, solvent naphtha and fuel, is a colorless liquid hydrocarbon mixture. However, frequent use also carries potential risks to both human health and the environment, which is why governments and regulatory bodies around the world have put strict guidelines into place. The potential to emit volatile organic compounds (VOCs), which aid in the formation of smog and may be harmful to people's health, is one of the main causes of concern.
Another problem is that it could contaminate soil and groundwater if it leaks or spills while being transported or stored. To avoid situations like this, rules have been established for the production, handling, storing, and transportation. Regulatory organizations may also audit and inspect to make sure that the companies are dealing with and operating according to the correct procedures. Thus, such factors are expected to hinder the growth of the global market during the forecast duration.
The increase in investment in the extraction is an emerging trend in market development. The petrochemical industry currently views increasing investment as a profitable move. It is being considered by investors as a viable option for constructing new petrochemical plants as well as for expanding existing ones. When compared to other feedstocks, naphtha is less expensive, making it a popular option for businesses looking to minimize their manufacturing costs. Additionally, compared to other feedstocks, naphtha has a higher yield per ton, which increases its appeal.
Moreover, turning into the feedstock of choice for petrochemical producers due to the rising demand for petrochemicals and the requirement for a safe and reliable supply of feedstocks. APAC nations including China, India, and Japan, have significantly invested in infrastructure. For instance, Exxon Mobil Corp. (Exxon Mobil) recently announced an investment in Huizhou, Guangdong Province's Dayawan Petrochemical Industrial Park. It will increase the company's 1.6 million ton annual production. Thus, the above-mentioned factors are expected to drive market growth during the forecast time.
The market faces a multitude of government regulations amid evolving global dynamics, prices and industrial landscapes. Key players like Reliance Industries Limited, Exxon Mobil Corporation, and SABIC encounter various hurdles in the production and distribution of naphtha-derived products. Russia and Italy, along with other major economies, confront challenges related to urbanization and shifting demands in various sectors. The fluctuating availability and pricing of key components such as toluene, benzene, propylene, ethylene, and butadiene pose significant hurdles in the production process, affecting downstream industries including coatings and other applications. The process of distillation faces and steam crackers complexities, impacting the overall supply chain of naphtha-based products.
Environmental concerns regarding aircraft emissions, natural gas liquids, and the need for additives underscore the sector's responsibility to address its impact. Collaborations between key end-user industry members like China Petrochemical Corporation, Formosa Petrochemical Corporation, and PDV LLC are crucial for sustainable advancements. Additionally, the sector grapples with challenges related to the maintenance of steam cracking and furnace materials, affecting production and construction activities. Ensuring quality and meeting the demands of diverse end-user industries while addressing environmental threats remains a significant challenge.
The market for power stoves in regions like Indonesia, Israel, and Taiwan witnesses a growing demand as consumers seek efficient and innovative cooking solutions. The market dynamics also witness new entrants seeking to establish their image and capture a share by leveraging Japanese technological advancements. As they enter this section of the market, their success hinges on providing a seamless experience and staying updated with the latest renewable price trends.
The market share growth by the heavy segment will be significant during the forecast years. Due to its adaptable qualities and wide range of uses, heavy segment has attracted a lot of attention in the global market. The demand for heavy segments has significantly increased over the past few years, making it one of the most sought-after products.
Get a glance at the market contribution of the End User segment Request Free Sample
The heavy segment was valued at USD 126.33 billion in 2017 and continued to grow until 2021. The use of heavy in the manufacture of petrochemicals is one of the main factors contributing to its high demand. It is a crucial raw material for the manufacture of many petrochemical goods, including resins, synthetic rubber, and plastics. It plays a vital role in producing fuel products, particularly meeting the gasoline demand. Additionally, the increased popularity of shale gas has led to a growing demand for solvent naphtha as a diluent in the transportation of crude oil. The automotive sector is another important factor boosting the market for heavy segment. Thus, the above-mentioned factors are expected to drive the growth of the segment in the global market during the forecast years.
The byproduct of crude oil refining is crucial in petrochemical production of petroleum naphtha, gasoline blending, and as a solvent. It's utilized in agriculture and synthetic material manufacturing, with growing interest in its renewable naphtha price.
APAC is estimated to contribute 31% to the growth of the global market during the projection period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market analysis and report during the forecast duration.
For more insights on the market share of various regions Request Free Sample
In APAC, demand for various petrochemicals is rising, which also increases the demand. The petrochemical industry's explosive growth in the APAC region is one of the main factors supporting demand. Numerous significant chemical producers are located in the region, and they heavily rely on it as a feedstock to create a variety of goods, such as plastics, solvents, and synthetic fibers. The need is anticipated to grow alongside the expansion of these industries. APAC is also seeing an increase in the demand for transportation fuels, that need a blending ingredient to improve their performance characteristics. With the growing number of cars on the roads in countries such as India and China, the demand from the transportation sector is also expected to continue to rise during the projection period.
With several countries in the region having a sizable production capacity, the APAC region is also a significant producer of this fuel. South Korea, Japan, and China are some of the biggest producers, and all three have made significant investments recently to increase their refining capacity. The APAC region is less dependent on imports from other regions as a result of its increased production capacity, which allows it to meet most of its own demand. Hence, such factors will boost regional market growth during the projection period.
Companies are implementing various strategies by analyzing factors such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product or service launches, to enhance their presence in the market growth and forecasting.
2M Holdings Ltd. - The key offerings of the company include the distribution through its subsidiary Banner Chemicals Ltd.
The market growth analysis report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
2M Holdings Ltd., Alexandria Mineral Oils Co., Bajrang Petrochemicals Pvt. Ltd., Basin Electric Power Cooperative, Chevron Corp., China Petrochemical Corp., Exxon Mobil Corp., Formosa Petrochemical Corp., Ganga Rasayanie Pvt. Ltd., Indian Oil Corp. Ltd., LG Chem Ltd., PAO NOVATEK, Pyroplast Energy Ltd., QatarEnergy, Reliance Industries Ltd., Sasol Ltd., Saudi Arabian Oil Co., Shell plc, UPM Kymmene Corp., and Mitsubishi Chemical Corp.
The ongoing focus on research and development by various research teams globally aims to leverage derivatives, exploring ways to mitigate market volatility and enhance the availability of naphtha-based products. These initiatives play a pivotal role in shaping the future trajectory of the market, influencing not only market dynamics but also industrial competition and strategy. The evolving consumption trends and the exploration of bionaphtha-based and renewable substitutes underscore the industry's commitment to addressing environmental concerns while meeting diverse industrial demands and market growth and trends.
Market Dynamic
With the dynamic developments in global markets, the Naphtha market is a focal point, impacting key players like Reliance Industries Limited. The market, involving the trade and consumption of the flammable liquid hydrocarbon mixture, extends its influence across diverse sectors. With a close relationship to toluene, benzene, propylene, ethylene, and butadiene, the market's consumption trends reflect the evolving needs of economies worldwide. Urbanization and development drive the demand for coatings in regions like Mexico, emphasizing the pivotal role of energy derived from naphtha's distillation. Safety remains paramount given its volatile nature, warranting attention in the context of global Naphtha markets and solvent applications.
The market research report forecasts market research and growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 - 2021.
Naphtha Market Scope |
|
Report Coverage |
Details |
Page number |
157 |
Base year |
2022 |
Historic period |
2017 - 2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.05% |
Market growth 2023-2027 |
USD 47.01 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
3.5 |
Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 31% |
Key countries |
US, China, India, Japan, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
2M Holdings Ltd., Alexandria Mineral Oils Co., Bajrang Petrochemicals Pvt. Ltd., Basin Electric Power Cooperative, Chevron Corp., China Petrochemical Corp., Exxon Mobil Corp., Formosa Petrochemical Corp., Ganga Rasayanie Pvt. Ltd., Indian Oil Corp. Ltd., LG Chem Ltd., PAO NOVATEK, Pyroplast Energy Ltd., QatarEnergy, Reliance Industries Ltd., Sasol Ltd., Saudi Arabian Oil Co., Shell plc, UPM Kymmene Corp., and Mitsubishi Chemical Corp. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market forecasting COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Get lifetime access to our
Technavio Insights
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.