Entry of New Players to Drive Petrochemicals Market
The petrochemicals market has witnessed an exponential growth over the past few decades, owing to the increasing demand from a range of end-use industries, including aerospace, building & construction, agriculture, food & beverage, electrical & electronics, healthcare, and automotive. However, in the current scenario, the mounting environmental concerns revolving around the production of petrochemicals has played a key role in transforming several manufacturing processes and other processes that primarily contribute to climate change. Moreover, as nearly 99% of the total plastic is manufactured from oil & gas, the global petrochemicals market is likely to witness an impressive growth rate in the upcoming years.
However, with increasing concerns pertaining to the use of plastic and its environmental impact, the demand for plastic products in several core industrial sectors has declined consistently. Thus, the growth of the global petrochemicals market is likely to slow down in the second half of the forecast period. Although a majority of the market players operating in the current petrochemical market landscape has consistently reported noteworthy profits, the overall market is currently transforming in a number of ways. The drop in crude oil prices over the past decade is one of the key factors that are likely to bolster the growth of the global market for petrochemicals.
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Several companies operating in the developing countries, including China, the Middle East, and Africa, and developed regions such as North America have made noteworthy profits due to the gas feedstock. Moreover, the demand from developing regions is likely to drop in the upcoming years due to which, several companies operating in the current petrochemical market landscape are expected to revise their value-creation strategies. At the back of these factors, along with a host of other drivers, the global petrochemicals market is projected to reach market value of US$ 676.5 Bn by the end of 2030.
Emerging Markets Witness Rise in Number of Petrochemicals Companies
Over the past few decades, the growth of the petrochemicals market has largely been driven by the growing demand from the developing regions. In addition, the increasing use of low-cost gas feedstocks as opposed to oil-based feedstock has largely benefited petrochemicals companies over the past few years– a trend that is expected to continue during the forecast period. The new shale gas-supply in North America has primarily profited companies in the region due to which, the market growth in North America is expected to remain consistent over the upcoming years.
As per current observations, consolidation in developed markets and rise in the number of new market entrants in developing regions are projected to drive the global petrochemicals market during the assessment period. A major share of the market can be attributed to national oil companies (NOC), international oil companies, and other companies with noteworthy petrochemical assets. Furthermore, investments in the petrochemicals market are largely being pumped by national oil companies due to the growing demand from the domestic market.
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Volume Demand to Drop amid COVID-19 Pandemic
The outbreak of the novel COVID-19 pandemic is expected to have a strong impact on the growth of the petrochemicals market in 2020. Travel restrictions, dwindling prices of oil & gas, production cuts, and growing requirement for chemicals and refined products are expected to hinder the growth of the market for petrochemicals in 2020. The ongoing efforts taken by various governments to curb the transmission of the novel coronavirus is projected to disrupt the overall supply-chain of various raw materials that are used across the petrochemicals market. In addition, restrained movement in the shipping industry and drastic decrease in the number of seaborne vessels have played a key role in hindering the growth of the global petrochemicals market. The market is anticipated to show signs of recovery toward the last quarter of 2020 and the first quarter of 2021, as air travel and cross-border activities are gradually expected to resume.
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Petrochemicals Market: Key Highlights
- New materials are often used as building blocks for product development and technology breakthroughs in the electrical & electronics industry. Modern electrical & electronics industry is highly dependent on petrochemical products for the manufacture of electrical and electronic goods. Everyday appliances such as CD players, telephones, radios, computers, and televisions are manufactured on a large scale with the assistance of the petrochemicals industry.
- Petrochemicals have become the most significant element in our daily lives and have entirely revolutionized the electronics sector by making some of the most important scientific inventions. The petrochemicals industry has proved to be extremely beneficial for the electronics industry.
- Automobile components made from petrochemicals products offer exceptional benefits such as lightweight that lead to less fuel consumption. This, in turn, helps in pollution control. Ease in processing helps in cutting down assembling time. The usage of petrochemicals enables to enhance the safety aspects of automobile.
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