The global alpha olefin market size was estimated at USD 8.26 billion in 2018 and is estimated to expand at a CAGR of 4.8% from 2019 to 2025. Growing demand for polyethylene, owing to its usage in various applications, such as packaging, industrial processes, consumer goods, and others is expected to drive the market. Alpha olefins are organic compounds produced by the oligomerization of ethylene, which is the most commonly used process. Oligomerization process consists of products with even-numbered carbon chains, usually ranging from C4 to C30+.

Different companies, such as Chevron, Shell, and Phillips, have developed their own manufacturing techniques. Modifications by these producers at different stages of the reaction sequence lead to different product and chain-length of alpha-olefin polymers. Ethylene, which is manufactured using crude oil and naphtha, is the major raw material used in the production of alpha-olefin. Shale gas boom of 2008 in North America led to a dramatic decrease in the cost of industrial energy and feedstock.

Shale rocks can also be used as innovative, inexpensive cracker feed for ethylene production, which has resulted in increased supply levels coupled with lower market pricing. Investments in various cracker joint venture projects along with abundant availability of low-cost ethane from reserves of shale gas in U.S. is projected to boost raw material supply for the production of alpha-olefin. The market is anticipated to witness a stable demand-supply over the forecast period. Key companies, such as INEOS, SASOL, and CPChem, have invested in capacity expansion to help retain the market balance, as well as product prices.

However, the market is projected to witness a linear increase in product prices in line with a rise in the cost of ethylene over the forecast period. The prices are normally based on raw material costs and the production technology used. Ethylene prices have been fluctuating in the past and thus a similar trend can be observed with alpha-olefin prices. A decrease in ethylene prices in 2012 on account of the shale gas boom in U.S. has directly affected the product prices.

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Further key findings from the report suggest:

• By product, the 1-Hexene segment is anticipated to exhibit a revenue-based CAGR of 5.8% from 2019 to 2025. It is used in large quantities in the production of polyethylene, which is used in various end-use industries such as packaging, consumer goods, and automotive

• By application, polyethylene production dominated the market in terms of revenue, with a share of over 53.0% in 2018 owing to growing need for lightweight, durable plastics. Infrastructural development in emerging countries such as China, India, and Brazil has boosted demand for high-density polyethylene (HDPE) pipes and cables

• The U.S. alpha olefin market is anticipated to exceed 1,541 kilotons by 2025, owing to abundant availability of raw material, which has spurred industrialization in the country

• Industry participants are focusing on developing new and sustainable products, along with various R&D activities to fulfill the demand stemming from local markets

• Some of the key industry participants are Chevron Phillips Chemical Company LLC, Dow Chemical Co., ExxonMobil Corporation, and Petrochemicals (Malaysia) Sdn. Bhd.

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