Global demand for petrochemical products is seen to reach $890 billion by 2020, increasing at an annual compound growth rate of 6.5 percent between 2015 and 2020.
Demand was valued at $550 billion in 2014, according to an industry report issued by US-based Zion Research.
“Growing demand from key end user inductees including construction, packaging, transportation, textile, plastics, healthcare etc., coupled with favorable operating conditions mainly in the Middle East and Asia Pacific is expected to drive the global market for petrochemicals over the next five years,” the report said.
While ethylene, used in making polypropylene and propylene oxide, accounted for 25 percent of the global petrochemical market in 2014.
Methanol is projected to be the fastest growing segment from 2014 to 2020.
“Growth of methanol is directly related to its increasing usage in gasoline blending and methanol to olefins (MTO) processes,” according to the report.
Gulf-based companies that might benefit from the trend include Saudi Basic Industries Corp (SABIC), Saudi International Petrochemical Co. (Sipchem), Chemanol, and Industries Qatar (IQ).
Saudi Arabia’s key competitors include: BASF SE; ExxonMobil; the Dow Chemical Company; Shell Chemical Company; Sinopec; Lyondell Basell Industries; Total S.A.; Sumitomo Chemical Co. Ltd.; Chevron Phillips Chemical Company LLC; and E. I. du Pont de Nemours.
Demand in Asia Pacific, led by China, will continue to fuel consumption of petrochemicals, followed by North America and Europe, analysts projected. In 2014, Asia Pacific accounted for 50 percent of total consumption volume.
The market, however, is expected to face hurdles which will affect its growth rate, including increasing awareness about environmental issues such as pollution and global warming. Petrochemical makers will also have to contend with dwindling fossil hydrocarbon reserves and a growing trend toward shifting to bio-based chemicals.
Write to Abeer Allam at abeer.allam@argaam.com
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