Propylene Market is Estimated To Witness High Growth Owing To Increased Demand from Polypropylene Manufacturing
The propylene market is estimated to be valued at US$ 4.37 Bn in 2023 and is expected to exhibit a CAGR of 5.0% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Propylene is a colorless gas or liquid that is produced as a co-product of ethylene production through steam cracking of hydrocarbons. It is an important petrochemical used as a building block in the production of various plastics, fibers and synthetic materials. Polypropylene is one of its largest applications and contributes significantly to its demand worldwide.
Market key trends:
One of the key trends driving growth in the propylene market is the increased demand from polypropylene manufacturing industries. Polypropylene is lightweight, durable and corrosion resistant making it ideal for various commercial and industrial applications. It is used across industries like packaging, textiles, automotive, construction and healthcare. Rising consumption of polypropylene from these booming end-use industries is fueling propylene consumption globally. Also, growing consumer demand for packaged and processed food & beverages is positively impacting polypropylene packaging market which in turn is complementing the propylene market.
Porter's Analysis
Threat of new entrants: The propylene market has high capital requirements for setting up production plants and R&D. Additionally, existing suppliers have well established distribution and supply chains which create barriers for new players.
Bargaining power of buyers: Buyers have moderate bargaining power due to the presence of many established suppliers. However, differentiated products provide some customer lock-in.
Bargaining power of suppliers: A few major companies control the global supply of propylene. This gives them significant influence over prices.
Threat of new substitutes: No cost-effective substitute exists for propylene in its major end-use industries like polypropylene and propylene oxide production.
Competitive rivalry: Intense competition exists among major suppliers to gain market share.
SWOT Analysis
Strengths: Growing end-use industries like packaging and construction boost demand. Established supply chains of major players ensure consistent supplies.
Weaknesses: Fluctuating raw material prices affect costs. Dependency on crude oil prices for feedstock.
Opportunities: Rising polypropylene consumption in Asia Pacific poses opportunities. Developing economies increasingly adopt propylene in various applications.
Threats: Stringent environmental regulations around VOC emissions during production. Threat from substitute polymers in certain applications.
Key Takeaways
The Global Propylene Market is expected to witness high growth, exhibiting CAGR of 5.0% over the forecast period, due to increasing consumption of polypropylene and propylene oxide in end-use industries. The Asia Pacific region dominates the global market, with China being the major consumer as well as producer of propylene. China accounted for over 30% of the global polypropylene demand in 2023. Europe and North America are also prominent regions.
Key players operating in the propylene market are BASF SE, BP Plc., China Petroleum & Chemical Corporation, ExxonMobil Corporation, IRPC Plc., LyondellBasell Industries Holdings B.V., Reliance Industries Ltd, SABIC, The Dow Chemical Company, and TOTAL S.A. The market is highly consolidated with the top 5 players holding over 50% of the global production capacity. Established integrated players gain advantage from economies of scale in production and distribution. New capacity additions by major suppliers will further satisfy the rising global demand.