Petrochemicals Market is Estimated To Witness High Growth Owing To Increasing Construction Activities

Market Overview:

Petrochemicals are basic chemicals such as ethylene, propylene, butadiene, benzene, xylene, and methanol that are produced from petroleum. They are the raw materials for a wide range of products such as plastics, tires, fibers, rubbers, solvents, and surfactants. The growing demand for plastics from various end-use industries including construction, automotive, consumer goods etc. is driving the petrochemicals market.

Market key trends:

One of the key drivers for the petrochemicals market is the increasing construction activities across both developed and developing regions of the world. Petrochemicals find major applications in the construction sector for making pipes, wires, fittings, panels etc. According to the Global Construction 2030 report, the global construction output is expected to grow by 85% to US$15.5 trillion by 2030.

The global Petrochemicals Market Share is estimated to be valued at US$ 584.50 Billion in 2023 and is expected to exhibit a CAGR of 7.0% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights. Porter’s Analysis

Threat of new entrants: Established players have economies of scale and brand recognition making entry difficult for new players. Players need significant capital to enter market.

Bargaining power of buyers: Buyers have some bargaining power as product differentiation is low. However, switchign costs are high once buyers invest in facilities specific to certain chemicals

Bargaining power of suppliers: Key raw materials are crude oil and natural gas placing suppliers in strong position. However, presence of many suppliers balances out power.

Threat of new substitutes: Substitution threat is relatively low as petrochemicals have few direct substitutes and find usage in many end-use industries.

Competitive rivalry: Intense as industry is dominated by large multinational players. Price competition is high due to overcapacity.

SWOT Analysis

Strengths: Large capital requirement acts as barrier to entry. Integrated operations offer economies of scale.

Weaknesses: Overcapacity leads to volatile prices and margins. Dependent on crude oil prices exposing profits to volatility.

Opportunities: Growing plastics demand from industries like packaging and construction offers scope. Development of shale gas boosts diversification opportunities.

Threats: Stringent environmental regulations raise compliance costs. Political instability in oil producing regions poses supply risks.

Key Takeaways

The global petrochemicals market is expected to witness high growth, exhibiting CAGR of 7.0% over the forecast period, due to increasing plastics demand especially in Asia Pacific region. The Asia Pacific region dominates the global market and is expected to grow at fastest pace due to expansion of end-use industries in China and India.

Regional analysis: The Asia Pacific region accounts for over 50% of global petrochemicals demand led by China, India, Indonesia and other developing Asian countries. Plastics consumption is increasing rapidly in the region driven by growth in packaging, consumer goods, automotive and construction industries. With economic development and rising incomes, the regional petrochemicals market is poised to expand further.

Key players analysis: Key players operating in the petrochemicals market are BASF SE, Sinopec Limited, ExxonMobil, The Dow Chemical Company, Shell Chemical Company, SABIC, LyondellBasell Industries, Total S.A., Sumitomo Chemical Co. Ltd., Chevron Phillips Chemical Company LLC and E. I. du Pont de Nemours and SNPC, INEOS, and Reliance Industries. They are focusing on capacity expansions and partnerships to tap growth opportunities.


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