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The naphtha market size is forecast to increase by USD 44.30 billion at a CAGR of 3.72% between 2023 and 2028. The market's growth is influenced by several factors, such as the growing demand for naphtha in the petrochemical industry, its increasing adoption in agriculture, and the rising need for petrochemical feedstock and petroleum liquid feedstock. The petrochemical industry's demand for naphtha, a key raw material, continues to grow, driven by the expanding production of various petrochemicals. Furthermore, naphtha's use in agriculture, particularly as a solvent and fuel, is on the rise, further boosting market growth. Additionally, naphtha's importance as a feedstock for various petrochemical processes underscores its significance in driving market expansion. These factors collectively contribute to the market's evolution, reflecting the diverse applications and growing importance of naphtha in various industries.
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The naphtha market growth and trends research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
The market share growth by the heavy naphtha segment will be significant during the forecast period. In the naphtha market, heavy naphtha has emerged as a crucial feedstock due to its diverse applications. Post-pandemic, the demand for heavy naphtha is anticipated to continue growing in the medium term.
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The heavy naphtha segment was valued at USD 129.20 billion in 2018. This trend is driven by its use in petrochemical production, particularly in the manufacture of plastics, synthetic rubber, and resins. Additionally, heavy naphtha is essential for gasoline production and as a diluent in crude oil transportation. The transportation sector, fertilizer industry, and power plants are significant consumers of naphtha, with aromatics and olefins being key products derived from it. In the petrochemical industry, heavy naphtha is used to produce benzene, butadiene, ethylene, propylene, and toluene. Emerging and industrialized economies, such as those in Asia, are major contributors to the increasing demand for heavy naphtha.
Natural gas liquids, including light and heavy naphtha, are vital raw materials for various business activities. The volatility of raw material prices and the availability of cheaper alternatives, such as LPG, may impact the market dynamics in the long term. Budgeting, investments, and expenditures on pipeline projects will have significant implications for the industry. The above-mentioned factors are expected to drive the growth of the heavy naphtha segment in the global market during the forecast period.
North America is estimated to contribute 32% to the growth of the global market during the projection period. Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the projection period.
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The Paraffin derivative, naphtha, experiences escalating utilization in the APAC region due to economic expansion and burgeoning industrial activity. The petrochemical sector's growth, particularly in the chemical-oriented and construction industries, fuels the demand for naphtha as a crucial feedstock. Manufacturers in these sectors rely on naphtha to produce various products, such as plastics, solvents, and synthetic fibers. Advancements in technology criterion, including distillation processes, contribute to the increased adoption of naphtha. Furnace substances, like coke and coal, are being replaced with naphtha due to its efficiency and lower customs duty. However, workforce shortages and air travel bans may hinder market growth. Naphtha is essential in the production of coatings and is used as a fuel in catalytic reforming processes. The aviation sector, including aircraft/planes, also consumes significant amounts of naphtha for jet fuel. Oil organizations continue to invest in research and development to optimize naphtha production and usage. These factors will drive naphtha market growth during the forecast period.
In the post-pandemic period, the workforce and economies are preparing for the medium term, and the naphtha market is experiencing significant changes. Naphtha, a key additive in the production of fertilizers, is essential for various industries, including personal care products, polymers, and synthetic rubber. The volatility in raw material prices, particularly naphtha, has significant implications for budgeting and investments in the fertilizer industry. The shift in trends towards cheaper alternatives, such as LPG, rubber, oils, and edible fats, may impact the demand for naphtha. The price of naphtha is influenced by the cost of crude oil and the availability of alternative fuels. The long-term implications of these trends on the market are uncertain. Moreover, the market's expenditure on fuel, lanterns, and power stoves are also affected by the volatility in raw material prices. The naphtha market's future relies on the ability to adapt to these changing market conditions and find cost-effective solutions to mitigate the impact of raw material price volatility. Chemical intermediates are essential in the production of personal care products.
The increase in demand for naphtha in the petrochemical industry is notably driving market growth. The petrochemical industry's workforce requires large quantities of naphtha as a feedstock for producing essential chemicals such as olefins, aromatics, and additives. The post-pandemic period has seen a rebound in economies, leading to increased demand for petrochemical products. This trend is particularly noticeable in emerging and industrialized economies. It is used in the production of various chemicals, including fertilizers, and is crucial in the transportation sector due to its role in gasoline production.
Furthermore, Light and heavy naphtha are used to produce aromatics like benzene, toluene, and xylenes, as well as olefins such as ethylene, propylene, and butadiene. Major petrochemical companies like Petronas in Johor and Ineos are investing in pipelined projects to meet the medium-term demand for naphtha. The volatility of raw material prices and the shift in trends towards cheaper alternatives like LPG may impact business activities in the long term. Naphtha is used in mission-critical applications, including power plants and steel plants. Its importance is further highlighted by its role as a feedstock in the production of additives used in various industries. Budgeting, investments, and expenditures in the petrochemical sector are influenced by the availability and price of naphtha. These factors are expected to drive naphtha market growth during the forecast period.
The increase in investment in the extraction of naphtha is an emerging trend in market growth. In the petrochemical industry, naphtha is gaining popularity as a cost-effective and high-yield feedstock for upgrading and expanding plants, as well as for new constructions. The economic advantage of naphtha, with its lower cost compared to other feedstocks, is particularly appealing to manufacturers seeking to optimize their budgets. The post-pandemic period is expected to see increased demand for petrochemicals, leading to a higher reliance on naphtha as a feedstock. Naphtha is used in various sectors, including the transportation industry for gasoline production and in the production of aromatics such as benzene, toluene, and xylenes, as well as olefins like ethylene, propylene, and butadiene.
Moreover, naphtha is also used in the production of fertilizers and in power plants and industrial processes. Major players in the industry are investing in pipelined projects to secure stable supply of naphtha. The shift towards naphtha as a preferred feedstock is expected to have significant medium-term implications for the industry, with potential volatility in raw material prices. Emerging economies and industrialized economies alike are expected to increase their use of naphtha as a feedstock in the coming years. Natural gas liquids, including light and heavy naphtha, are becoming increasingly important as feedstocks in the petrochemical industry. Business activities in the sector are expected to remain mission critical, with naphtha playing a key role in powering various applications, including those in the power generation and steel industries. The use of cheaper alternatives, such as LPG, may also impact the market dynamics in the long term. Thus, the above-mentioned factors are expected to fuel naphtha market growth during the forecast period.
Stringent regulations on the usage of naphtha are major challenges impeding market growth. Stringent regulations pose a challenge for the market despite its value as a feedstock in various industries. Concerns over volatile organic compound (VOC) emissions are a significant issue, particularly as economies recover post-pandemic and demand for naphtha increases. Key players in the market must navigate these regulations while also managing budgeting and investments in pipelined projects.
Further, the volatility of raw material prices and the shift towards cheaper alternatives like LPG further complicate the market landscape, particularly for mission-critical applications in power and steel plants. Mitigating VOC emissions through additives is crucial, adding another layer of complexity for facilities using naphtha. Thus, such factors are expected to hinder naphtha market growth during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
2M Holdings Ltd. - The key offerings of the company include naphtha, which is distributed through its subsidiary Banner Chemicals Ltd.
The naphtha market forecasting report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Naphtha is a light paraffinic hydrocarbon liquid used extensively as a feedstock in the petrochemical industry. The global market is driven by the increasing demand for petrochemicals and the growing usage of naphtha as a feedstock in the production of high-performance polymers and other chemicals. The demand for naphtha is primarily influenced by the petrochemical industry, particularly in the production of polyethylene and polypropylene. The market is also impacted by factors such as supply and demand dynamics, geopolitical risks, and regulatory policies. Major producers and consumers include countries in Asia Pacific, Europe, and North America. APAC is expected to dominate the market due to the presence of large petrochemical industries in countries like China, India, and South Korea.
Moreover, the naphtha market is highly competitive, with key players including Shell. These companies are focusing on expanding their production capacity and increasing their market share through strategic partnerships and collaborations. Economies of scale, technological advancements, and cost-effective production are some of the key trends driving the naphtha market. The market is also expected to witness significant growth due to the increasing demand for naphtha in the production of bio-based chemicals and the growing usage of naphtha as a fuel in the transportation sector. In conclusion, the market is expected to grow significantly in the coming years due to the increasing demand for petrochemicals and the growing usage of naphtha as a feedstock and fuel. The market is highly competitive, with key players focusing on expanding their production capacity and increasing their market share through strategic partnerships and collaborations.
Market Scope |
|
Report Coverage |
Details |
Page number |
164 |
Base year |
2023 |
Historic period |
2018 to 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 3.72% |
Market growth 2024-2028 |
USD 44.3 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
3.52 |
Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
Performing market contribution |
North America at 32% |
Key countries |
US, China, Germany, India, and Japan |
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., Mitsubishi Chemical Corp., PAO NOVATEK, Pyroplast Energy Ltd., QatarEnergy, Reliance Industries Ltd., Sasol Ltd., Saudi Arabian Oil Co., Shell plc, and UPM Kymmene Corp. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period. |
Customization purview |
If our naphtha market forecast report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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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 Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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