Petrochemicals are organic compounds derived from petroleum or natural gas through chemical reactions using catalysts. Some common petrochemicals include ethylene, propylene, butadiene, benzene, methanol, and xylene. They are used as raw materials or refinery feedstocks in the manufacture of plastics, synthetic rubbers, fibers, fertilizers, and other products. The global construction and infrastructure industries have witnessed rapid growth over the past decade. Construction activity is projected to increase further due to continuous investments in residential, commercial, and infrastructure development projects worldwide. Petrochemicals such as polymers find widespread applications in the construction sector. Polymers are used in pipes, roofing sheets, insulation, furniture, interiors, and other applications due to their excellent properties like durability, flexibility, corrosion resistance, and cost-effectiveness.
The global Petrochemicals Market is estimated to be valued at US$ 565.55 Bn in 2023 and is expected to exhibit a CAGR of 5.9% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends in the petrochemicals market is increasing usage of recycled plastics. Attributed to growing concerns regarding environmental pollution and depletion of fossil fuels, recycling of plastics has gained significant attention in recent years. According to the European Union, recycled plastics reduce carbon dioxide emissions by as much as 80-90% when they replace virgin plastics. Major companies in the petrochemicals industry are investing in technologies to recycle mixed plastic waste into hydrocarbon feedstocks that can be reintroduced into the petrochemical production chain. This enables circularity in plastic usage and reduces dependence on crude oil. For instance,LOOP Industries aims to reprocess mixed PET plastic waste in a depolymerization process to produce purified terephthalic acid and ethylene glycol monomers to produce virgin PET polymer.
Porter’s Analysis
Threat of new entrants: The petrochemicals market requires high capital investment for setting up manufacturing plants and developing infrastructure for sales and distribution. These factors pose significant entry barriers for new players.
Bargaining power of buyers: The buyers have moderate bargaining power as petrochemical products are crucial inputs for various end-use industries. However, presence of many established players limits switching costs for buyers.
Bargaining power of suppliers: Major petrochemical companies operate integrated production facilities and source key raw materials like crude oil and natural gas directly from suppliers. This gives them greater control over suppliers.
Threat of new substitutes: No cost-effective substitutes exist for most major petrochemicals.ongoing R&D aims to develop renewable substitutes but commercial viability remains a challenge.
Competitive rivalry: The market has presence of large multinational corporations. Intense competition over market share, pricing, and new product development has led to consolidation to benefit from economies of scale.
Key Takeaways
The Global Petrochemicals Market Size is expected to witness high growth.
Regional Analysis: North America is another major market for petrochemicals driven by resurgence in shale gas production and capacity additions by leading players. Availability of raw materials at competitive prices and techno-economic advantages over naphtha-based crackers have boosted investment in North America.
Key players operating in the petrochemicals market are Lionbridge, TransPerfect, SDL plc, LanguageLine Solutions, Telelanguage, Straker Translations, GlobaLexicon, Day Translations, GLOBO Language Solutions, Language Services Associates (LSA), Language Connect, CSOFT International, WordExpress Corporation, The Geo Group Corporation, Vocalink Global. These companies are focusing on capacity expansion as well as backward integration to gain competitive advantage.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it