Alpha Olefin Market Report

Alpha Olefin Market Analysis By Product, (1-Butene, 1-Hexene, 1-Octene, 1-Decene, 1-Dodecene), By Application (Polyethylene, Detergent Alcohol, Synthetic Lubricants), By Region, And Segment Forecasts, 2014 - 2025

Published: November 2017  |  136 Pages  |  Format: PDF  |  Report ID: 978-1-68038-356-0

Industry Insights

The global alpha olefins market size was valued at USD 8.26 billion in 2016, and is expected to grow at a CAGR of 4.8% during the forecast period. A significant feedstock used for the manufacturing of alpha olefin is ethylene, which is produced globally by using gas-based oil and naphtha. The key applications of ethylene include industrial reactions, such as polymerization, oligomerization, halogenation, hydrogenation, alkylation, hydration, and hydroformylation. 

North America experienced a boom in shale gas in 2008, leading to a huge decrease in the cost of industrial feedstock and energy. Shale rocks are used as a novel, low-priced cracker feed for ethylene manufacturing in this region, which has resulted in low market pricing and increased supply levels. The resurgence of investments is various enormous, homogenous cracker projects, in addition to plentiful, low-cost ethane supply from shale gas reserves in the United States are likely to spur the prerequisite supply required for the production of alpha-olefin.

U.S. alpha olefin market revenue, by product 2014 - 2025 (USD Million)

U.S. alpha olefin market

Alpha olefin market will probably experience a balanced supply-demand condition over the forecast period. Recent capacity additions by key market players such as CPChem, INEOS, and SASOL are expected to help retain the market balance and thus keep a check on prices. The market is projected to witness a linear increase in product prices in line with inflation in ethylene prices over the forecast period. 

Three processes have had a controlling share in the current manufacturing scenario—Chevron Phillips Chemical (CPChem), Ethyl (owned by INEOS) and Shell. The CPChem route uses a singular stage for production, though it is the least feasible option amongst other processes in product distribution. On the other hand, two separate steps are used by the Ethyl process, which also helps in giving greater flexibility in product distribution, but at the cost of increased process complexity. 

Alpha olefins are recognized to have no toxic effect on human and animal population. The favorable regulatory scenario in the presence of REACH and the U.S. EPA is expected to act in support of the global market. Regulatory support towards the development of bio-based alpha olefin is expected to boost the market over the forecast period. Strict governmental regulations regarding use of polyethylene, which is the largest application segment, are expected to pose a challenge for the market growth.

Application Insights

Polyethylene application accounted for the highest alpha olefin demand in 2014. It is widely used in automotive applications, household applications, films, containers, appliances, packaging and industrial applications. High demand from various application segments on account of its versatility, easy processability, recyclability, and low cost is expected to fuel polyethylene market augmentation. Growing population and increasing consumer spending in emerging markets of China, India, Brazil, and Mexico are further expected to augment the polyethylene market over the forecast period. 

Global alpha olefin market revenue by application, 2016 (%)

Global alpha olefin market

Normal alpha olefins are considered to be the best intermediates for the production of alpha olefin sulfonate (AOS) surfactants. The advantages achieved are good foaming and wetting properties, high hard-water compatibility, and superfine detergency. Other than being rapidly biodegradable, AOS is unhampered of skin irritants and sensitizers. C14-C16 AOS blends are usually used for the production of liquid hand soaps.

For the production of semi-linear alcohol, plasticizers for polyvinyl chloride could be manufactured, beginning with an oxo reaction of C6, C8, C10 olefins with hydrogen and carbon monoxide. Alpha olefins are also used in both high-density and linear low-density polyethylene as comonomers, with a view of improving their properties. In HDPE, the olefins are used at up to 2 percent level to transmit stress-crack resistance, especially for household bleach bottles.

Regional Insights

North America was the most extensive regional market of total consumption in 2014. Increasing oil-drilling activities coupled with capacity expansions of key manufacturers are the major factors that contributed to the market augmentation. Asia Pacific is expected to be the fastest growing regional market over the forecast period. Growing polyethylene demand on account of surge in automotive and consumer goods market in China and India is expected to augment alpha olefin demand in the region.

Easy availability of raw material, such as ethylene, in the U.S. and Mexico coupled with the presence of key market players in the region, has resulted in alpha olefin market growth in North America. Major companies are steadily expanding their presence in the region to cater to growing regional demand and expand their footprint in the global market. These trends are expected to positively impact the North America alpha olefin market’s production landscape. Growing end-use application industries in Asia Pacific region are expected to augment the demand in the region.

Europe is also expected to witness a decline in the petrochemical industry since numerous ethylene plants are likely to become uneconomic over the forecast period, representing around 65% of overall European production capacity. Facilities in Europe are also majorly dependent on disadvantaged naphtha for alpha olefin production, creating competitive drawback as compared to the U.S or the Middle East.

Domestic producers are attempting to shift to lighter feedstock in order to improve their cost position; however, hurdles such as geographic location, infrastructure, supply contracts and co-product requirements could limit flexibility. The U.S. however is more ruthless in restructuring uneconomic plants and is less encumbered by political issues, creating more considerable scope for growth in the alpha olefin industry.

Competitive Insights

The global market has continuously been of high sensitivity to the economic conditions, along with the supply-demand scenario. Usually, the prices of alpha olefin are drafted on the basis of cost plus pricing method, where raw material pricing plays a major role. In addition, ethylene prices have been observed constantly fluctuating for a prolonged duration, and the similar trends can be observed with alpha olefin prices as well.

Alpha olefin industry is expected to experience balanced supply-demand conditions over the forecast period as well. Recent capacity additions by key market players such as CPChem, INEOS, and SASOL are expected to help retain the market balance and thus alpha olefin prices. The market is projected to witness linear increase in product prices in line with increase in ethylene prices over the forecast period.

In North America, Exxon Mobil’s linear low-density polyethylene concentrated on specialty grades using UNIPOL technology. Formosa is likely to produce LLDPE, gas-phase LL using H1 and B1 co-monomers. Dow is building a separate elastomers unit and using DOWLEX technology for Octene-1 LL grades. Sasol is constructing HDPE/LLDPE swing plants. In China, HDPE plants are inclusive of Hostalen and INNOVENE S bimodal technology.

Report Scope 

Attribute

Details

Base year for estimation

2016

Actual estimates/Historical data

2014 - 2016

Forecast period

2017 - 2025

Market representation                                                 

Volume in Kilotons, revenue in USD Million and CAGR from 2017 to 2025

Regional scope

North America, Europe, Asia Pacific, Middle East & Africa, Central & South America

Country scope

U.S., Germany, UK, France, China, India, Japan

Report coverage             

Revenue forecast, company share, competitive landscape, growth factors and trends

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Segments covered in the report

This report forecasts revenue growth at global, regional & country levels and provides an analysis on the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global alpha olefin market on the basis of product, application and region:

  • Product Outlook (Volume, Kilotons; Revenue, USD Million, 2014 - 2025)

    • 1-Butene

    • 1-Hexene

    • 1-Octene

    • 1-Decene

    • 1-Dodecene

    • Others

  • Application Outlook (Volume, Kilotons; Revenue, USD Million, 2014 - 2025)

    • Polyethylene

    • Detergent Alcohol

    • Synthetic Lubricants

    • Others

  • Regional Outlook (Volume, Kilotons; Revenue, USD Million, 2014 - 2025)

    • North America

      • U.S.

    • Europe

      • Germany

      • UK

      • France

    • Asia Pacific

      • China

      • India

      • Japan

    • Central & South America

    • Middle East & Africa

Key questions answered by the report
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