DataM Intelligence recently conducted a market study and trend analysis that indicated that the petrochemical market is anticipated to expand at a CAGR of 2.6% between the forecast periods of 2022 and 2029

• The demand rise for petrochemicals can be attributed primarily to strong growth for daily essentials such as personal care products and household goods. Further, geography has been an essential parameter for success in the petrochemical industry, particularly for capitalizing on emerging markets and having access to cheap feedstock. As the industry changes, businesses need to concentrate more on their core competencies and strategy
  
  
• Petrochemical growth is attributed to more accurate pricing due to improved micro-segmentation or data integration on market changes. The abundance of data and advancements in processing power enables similar value-creation levers, such as raising the output of polymerization machines, the yield of crackers or the operational dependability of compressors and heat exchangers, to further propel the respective market toward growth.
  
  
• The petrochemical sector was the only segment that saw an increase in oil use in 2020. An increasing number of countries have recently announced or introduced policies to scale up recycling and limit single-use plastics and investment in waste management and recycling featured in several stimulus packages," said the IEA.

ENTERPRISE, Nev., July 19, 2022 /PRNewswire/ -- Even though value-creation strategies are threatened by less readily available advantageous feedstocks and slower demand growth in emerging economies, by utilizing digital and advanced analytics to achieve a new level of performance and increase capital productivity on the sector's large-scale projects, it is predicted that the global petrochemicals market will surpass US$ 950 billion mark by 2029. However, businesses are reinventing their relationships with oil refining as the era of gas-powered transportation is ending. Though the transition from an economy that is primarily linear to one that is circular could be challenging to manage, it is not impossible.

The global petrochemicals market seems to be changing slowly but becoming potentially significant. Various efforts from end-users or the upstream oil and gas sector are changing how base chemical capacities are added and used. The choice of feedstocks, demand trends, governmental regulations and capital efficiency paradigms are just a few variables that influence regional base chemicals capacity additions. The above elements also influence the feedstocks that are utilized or gain popularity. A large portion of it is influenced by national policies that aim to either gain a sizable share of the petrochemicals markets or lessen the import dependence of some important base chemicals. Furthermore, by 2030, the market may undergo a radical transformation due to the adoption of new chemical manufacturing technologies.

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Petrochemicals Market – Key Findings of the Report

• Petrochemicals will be the main factors driving the global oil demand increase by 2030, surpassing gasoline or diesel. By 2030, global petrochemicals will consume an additional 56 billion cubic meters (bcm) of natural gas, roughly equal to today's half of gas consumption in Canada. The rise in vehicle electrification and the improvement in fuel efficiency of new vehicles are the main reasons why petrochemical production is outpacing fuel demand. In addition, petrochemicals will likely continue to serve as the basis for all the industrial and consumer goods people use daily.
• The petrochemical industry in the new millennium has been marked by regional asymmetry, where success largely depends on where you are. Businesses with roots in emerging markets have risen to the top of their respective industries and those close to cheap gas have reaped most of the rewards.
• The demand for ethylene and propylene has increased over the past ten years and integrated oil-and-gas companies and international petrochemicals have tried to increase capacity to keep up. For instance, the global ethylene capacity utilization rates have surpassed 90% between 2008 and 2020. The markets for C4 chemicals and aromatics are benefiting from rising demand. Strong growth, especially from Asia and high operating rates, particularly in C2 derivatives chain as well as C3 derivatives chain, has resulted in brisk margins for petrochemical companies globally in past three years. Manufacturers have maintained their higher profit margins due to lower oil prices, in contrast to the widespread practice of lowering feedstock costs to customers.
• Additionally, many petrochemical companies have significantly reduced manufacturing costs by switching from oil-based feedstocks to affordable gas feedstocks. The switch has impacted the production of C4 chemicals and aromatics to lighter chemical feedstocks such as benzene, paraxylene and butadiene, especially in the Middle East and North America, as several producers currently depend on fresh shale-gas supplies. The adequate supply of aromatics is already addressed by the fact that China already has a large number of crude oil to chemicals complexes by the end of 2022, putting a strong emphasis on producing aromatics, primarily benzene and paraxylene.
• Capital costs play a significant role in determining where petrochemical plants are located and can occasionally act as a full buffer against expensive feedstock costs. For instance, China's capital costs for building an ethylene cracker based on ethane are 50 and 70 percent lower than U.S. The lower feedstock (ethane) costs are effectively offset by the lower finished product shipping costs in China, which are combined with lower capital costs to make Chinese ethane-based capacity competitive. Given that petrochemical amenities require billions of dollars in financial assets over a longer period of time, businesses must take into account true product value, which is based on process, capital and feedstock costs. Regarding capital costs, ethylene production in China via the CTO route is five times more expensive than ethylene production using naphtha. Naphtha-based ethylene production, as opposed to the CTO route, became more economically feasible after 2015 as oil prices continued their downward trend. The respective trend is also valid for the regional differences in capital costs for new emerging technologies involving chemicals or crude. For instance, the capital costs of new COTC complexes in China are roughly 50% lower than those in the Middle East. Chinese petrochemical players, particularly in a low-price oil environment, have a significant competitive advantage due to their lower capital intensity and proximity to end markets with increasing demand.
• Asian petrochemical projects are significantly influenced by the region's expanding crude oil refining capacity, which is intended to meet the region's increased demand for fuels and consumer goods. For instance, it is anticipated that China, the largest automobile market in the world, will increase its refining capacity from 17.5 million barrels per day by the end of 2020 to 20 million barrels per day by 2025.
• By 2025, India's refining capacity will increase by more than half, reaching 8 million daily barrels. Asia will add more than half of the refining capacity between 2019 and 2027, with 70 to 80% of this capacity devoted to plastics. As a result, it is anticipated that Asia, especially China and India, will take the lead in expanding ethylene production capacity during the next 10 years.
• The growth in Asia's refining capacity will improve the region's supply of feedstocks for petrochemical projects, including naphtha, LPG and basic petrochemicals like ethylene and propylene. Additionally, it might boost regional demand for petrochemical blend stocks, including toluene, xylenes and MTBE, which are used as fuel additives.
• Petrochemical companies are expected to step up their efforts for ways to boost profitability and improve returns because the window of opportunity for using valuable feedstocks is closing. The industry's integrated and complex operations, where variable costs account for a sizeable portion of total costs, put it in a good position to benefit from digital and advanced analytics advancements. Modern petrochemical corporations are applying advanced analytics to commercial processes, operations and maintenance to increase yield and throughput, as well as to decrease downtime and increase profit margins. Significant efficiency gains have been made possible through digitizing work processes, which can also enhance safety performance.
• Deeper integration between refining and petrochemicals is anticipated to develop due to gas becoming the preferred source of petrochemical feedstock. Larger-scale future investments would seamlessly integrate crude-to-chemicals units or refining and olefins sites rather than just colocated refining and petrochemical plants. By utilizing synergies in raw-material integration and optimization, energy efficiency and sharing of common infrastructure, these units may have capital investment costs that are 10 to 20 percent lower and cash costs that are 5 to 15 percent lower than simple colocated units. NOCs are probably in a good position in this situation because they can combine their ability to finance the development of new technologies with their desire to participate in the relatively fast-growing petrochemical market.
• Over the past ten years, participation in chains based on aromatic petrochemical markets, such as purified terephthalic acid, paraxylene, phenol and polyamide, has increased beyond its historically low number of players due to increased demand and more stringent investment practices among producers.
• Demand for petrochemicals has increased as industries gradually recovered and markets reopened following the initial shock of COVID-19 in 2020. Polyethylene (PE) and Polypropylene (PP) remained resilient due to the high demand in the packaging sector, growing by 5 to 6 % between 2020 to 2021. The reopening of end markets played a major role in this recovery. For instance, the ability and desire to travel increased as vaccination rates rose. As a result, the reopening of businesses in the transportation, construction and textile sectors is on schedule.
• Producers in North America and Europe enjoyed historically high margins in the ethylene petrochemical value chain. In 2021, as oil prices kept increasing to US$ 70 per barrel, the cost curve for ethylene steepened, favoring producers in the Middle East and North America who had accessible, affordable sources of ethane. Therefore, the North American ethylene margin increased almost twofold over 2020 levels.
• Due to production halts and the competitive PE market, merchant PE producers experienced a record-high margin between US$ 600 and US$ 900 per Metric Ton. Similarly, the ethylene margin in Western Europe for PE producers significantly increased as it returned to pre COVID-19 levels due to market constraints and price increases. However, Asian PE producers reported less impressive margins. Due to two significant headwinds, China's ethylene and PE margins have been negatively affected from second half of 2021 to 1st quarter of 2022: first, rising oil prices have driven up the cost of producing naphtha crackers; second, weak regional demand and market length have put pressure on local prices and further reduced margins.
• In 2019, massive capacity increases and weak demand growth caused the industry value pool to fall. The decline was further accelerated in 2020 by the COVID-19 pandemic. The impact of the coronavirus on petrochemical demand was irregular across value chains, with automotive and construction applications suffering particularly significant decreases and packaging demand (notably in food, sanitary items and medical applications) remaining robust. In reaction to the pandemic, there has been an increase in delivery services, stockpiling and healthcare-related activity.
• Despite a few plants closing in specific regions, industry players have managed the short-term effects well and are already making plans for the medium-term.

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Petrochemicals Market – Growth Drivers

• Tighter investment discipline, a higher average level of industry-wide capacity utilization and an approach toward harnessing newer sources of industry profitability could be considered a significant market drivers for the global petrochemical market.
• Adopting a circular economy, utilizing upstream value creation opportunities and digital & advanced analytics integration could boost the market's demand and sales for petrochemicals.

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Petrochemicals Market – Key Players

Some of the major petrochemical market manufacturers are:

• BASF SE
• Sinopec Shanghai Petrochemical Company Limited
• Dow
• INEOS
• SABIC
• Formosa Plastics Corporation
• LG CHEM
• MITSUBISHI CHEMICAL
• LINDE
• LYONDELLBASELL INDUSTRIES
• EXXONMOBIL CHEMICAL
• Air Liquide S.A
• PetroChina Company Limited
• DUPONT
• Hengli Group Co., Ltd
• SUMITOMO CHEMICAL
• Toray Industries, Inc
• SHIN-ETSU CHEMICAL
• EVONIK INDUSTRIES
• RELIANCE INDUSTRIES

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The petrochemical market is segmented as follows:

Petrochemicals Market, by Type

Aliphatic

• Ethylene
• Propylene
• Butadiene
• Others

Aromatics

• Benzene
• Xylene
• Toluene
• MDI and TDI
• Others

Inorganic

Synthesis Gas

• Carbon Monoxide
• Hydrogen
• Others

Petrochemicals Market, by Raw Material

• Crude Oil
• Natural Gas
• Liquids (NGLs)
• Coal
• Others

Petrochemicals Market, by Manufacturing Processes

• Fluid Catalytic Cracking (FCC)
• Steam Cracking
• Catalytic Reforming

Petrochemicals Market, by Distribution Channel

• B2B
• B2C
• Others

Petrochemicals Market, by Application

• Polymers
• Solvents
• Rubber
• Paints and Coatings
• Adhesives and Sealants
• Surfactants
• Dyes and Inks
• Elastomers
• Packaging
• Cosmetics
• Others

Petrochemicals Market, by End-User

• Aerospace
• Packaging
• Agriculture
• Automotive & Transportation
• Building & Construction
• Consumer & Industrial Goods
• Electrical & Electronics
• Healthcare
• Others

Petrochemicals Market, by Region

• North America
• South America
• Europe
• Asia-Pacific
• Middle East and Africa

The competitive dynamics of the largest subsector of the chemical industry, the global petrochemical industry, are changing. Companies must comprehend the shifting dynamics of the market, as well as broad trends in consumer spending and sources of cost advantage, to make the best strategic decisions. Stay Updated with Chemical Industry Research Reports by DataM Intelligence:

1. Global Mono-Ethylene Glycol Market: The global mono-ethylene glycol market was valued at US$ 56.9 Bn in 2021. It is anticipated to expand at a CAGR of 6.9% from 2022 to 2029.
2. Global Polyolefin Market: The global polyolefin market was valued at US$ 303.1 Bn in 2021. It is anticipated to expand at a CAGR of 8.1% from 2022 to 2029.
3. Global Biocomposites Market: The global biocomposites market was valued at US$ 24.5 Bn in 2021. It is anticipated to expand at a CAGR of 16.2% from 2022 to 2029.
4. Global Emulsifiers Market: The global emulsifiers market was valued at US$ 8.5 Bn in 2021. It is anticipated to expand at a CAGR of 7.1% from 2022 to 2029.
5. Global Polyglycolic Acid Market: The global polyglycolic acid market was valued at US$ 5.3 Bn in 2021. It is anticipated to expand at a CAGR of 9.8% from 2022 to 2029.
6. Global Phase Change Materials Market: The global phase change materials market was valued at US$ 1.8 Bn in 2021. It is anticipated to expand at a CAGR of 18.1% from 2022 to 2029.
7. Global Aerosol Propellants Market: The global aerosol propellants market was valued at US$ 23.8 Bn in 2021. It is anticipated to expand at a CAGR of 7.2% from 2022 to 2029.
8. Global Oleo Chemicals Market: The global oleo chemicals market was valued at US$ 30.3 Bn in 2021. It is anticipated to expand at a CAGR of 5.8% from 2022 to 2029.
9. Global Acetonitrile Market: The global acetonitrile market was valued at US$ 0.3 Bn in 2021. It is anticipated to expand at a CAGR of 5.3% from 2022 to 2029.
10. Global Acrylic Resin Market: The global acrylic resin market was valued at US$ 17.3 Bn in 2021. It is anticipated to expand at a CAGR of 5.8% from 2022 to 2029.

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