Naphtha Market Analysis By Application (Chemical, Energy & Fuel) And Segment Forecasts To 2022

Published: March 2016 | Report Code: 978-1-68038-580-9 | Report Format: PDF

Industry Insights

Global naphtha market size was estimated at 270.7 million tons in 2014. This industry is expected to witness significant growth over the next seven years on account of increasing demand for transportation fuel globally. Rising product demand in hydrocarbon cracking process is expected to steer its demand in the petrochemical industry.

Common sources of production include refineries, gas and chemical plants. Refining of crude oil forms an essential part of production process. Hydrocarbon cracking under extreme pressure and temperature urges requirement for highly resilient components. Other factors governing the choice of material include environmental regulations and regional prices.

Other sources of naphtha production include coal tar and wood feedstock. Type of feedstock is incorporated depending on process yield and demand of downstream products including formaldehyde, pigment, chemical solvent, and fuel.

Based on the hydrocarbon structure and refinery process, there are primarily two compositions of naphtha i.e. paraffinic and heavy formation. Heavy naphtha also known as straight run benzene (SRB) is most commonly used in refinery catalytic reformers to enhance octane number of the fuels.

Primary applications include the production of gasoline and steam cracking of aromatic petrochemicals and olefins. Various factors affect the economic outlook of these processes including feedstock-to-yield ratio, refinery margins, existing geopolitics, OPEC-controlled prices and crude oil supply-demand scenario. A major application of aromatic form includes the production of fats, rubber, and personal care products. Regulations on benzene content of gasoline and crude oil pricing are anticipated to affect market growth over the forecast period.

Stringent government regulations coupled with political factors governing regional economies is anticipated to influence global trade policies. Financial outlook plays a major role in the commercialization of refinery projects, and it is affected by the geopolitical situation of the regions. The synergy between regional demand and refinery output affects capacity expansions thereby influencing storage of surplus products in the operating units.

North America naphtha market volume by application, 2012-2022 (Million Tons)

North America naphtha market

Application Insights

Naphtha usage as a chemical feedstock was the major application segment and accounted for over 65% of the total volume share in 2014. It is used in steam cracking process to produce ethylene, propylene, and gasoline. Other application includes catalytic reforming process that involves extraction process of benzene, toluene, and xylene.

Light naphtha plays a major role in petrochemical steam crackers. Major products of the cracking process include olefins and aromatics. Olefins form the primary feedstock for plastics production including polyethylene and polypropylene. Other chemical processes including production of chemical intermediates, polymers, and synthetic rubber utilize olefins as a primary resource.

Growing plastics demand in construction, packaging and electrical & electronics is expected to steer market growth over the foreseeable future. Energy & fuel accounted for over 25% of the total naphtha market revenue share in 2014. Naphtha is also used in some niche end-use segments as white petroleum liquid including the camp lanterns and stoves. Growing scope in above-mentioned applications is anticipated to drive growth over next seven years.

Regional Insights

Asia Pacific naphtha market dominated the global demand and accounted for over 45% of the total volume share in 2014. Asia Pacific emerged as the major exporter of petroleum products in 2014. Increasing population coupled with increasing electrical and transport equipment consumption is expected to drive product demand over next seven years. Growing plastics demand in construction and automotive sectors is also expected to fuel market growth over the forecast period.

Chemical processes comprising propane cracking and gasoline production are expected to steer product demand in the European market. However, the economic outlook of the downstream segment in this region is anticipated to affect growth in next seven years. U.S. petrochemical industry shifting towards low-cost alternatives such as LPG is expected to hinder product demand in the region. This can be attributed to volatile prices of crude oil and gas fluctuations that affect product demand in various regions.

By-products of steam cracker include butadiene, butane, ethylene, propylene, and gasoline. Growing automotive usage in emerging economies including India, Brazil and Thailand is expected to fuel gasoline demand in these regions. Other factors promoting such regional growth include recent developments such as sorptive desulfurization process that enhance the environmental performance of automobiles.

North America accounted for over 20% of the total revenue share in 2014 and is anticipated to witness a stagnant growth in next seven years. The stringent regulatory scenario in the region coupled with declining petroleum product manufacturing in the region owing to increasing environment concerns may be attributed to stagnant growth in the region.

High consolidation of oil refineries in Middle East region is expected to boost product demand over the foreseeable future. Its geographical advantage offers ample opportunity for chemical and energy sectors for utilizing domestic supply thereby minimizing operational costs. This is also expected to provide an opportunity for forward integration of plastics processing industry.

Competitive Insights

Global naphtha market share is highly fragmented with top five players including British Petroleum, Chevron, ExxonMobil, Shell and CNPC accounted for over 50% of the industry revenue share in 2014. The dominance of these companies in the global market can be attributed to their efficient distribution network across the world. Long term contracts with distributors and acquisition of petrochemical units form an essential strategy of their economic growth.

High degree of dependence on crude oil and natural gas industry dynamics has encouraged enterprises to integrate their operations across the value chain starting from raw material supplier to finished product distribution. Companies such as Mitsubishi Chemical and Reliance Industries have integrated their operations, starting from crude oil and natural gas production to end-product manufacture to increase the economies of scale and overall profitability. Other industry participants include Total SA, Indian Oil Corp., Novatek, Lotte Chemical Corp., Novachem, SABIC, and Mangalore Refinery and Petrochemicals Limited (MRPL).

Key question answered by the report
  • What was the market size from 2013 to 2015?
  • What will be the market growth till 2024 and what will be the resultant market forecast in the year?
  • How will the market drivers, retraints and future opportunieties affect the market dynamics and a subsequent analysis of the associated trends?
  • What segment and region will drive or lead market growth and why?
  • A comprehensive mapping of the competitive landscape and the market participants behavior.
  • What are the key sustainability strategies adopted by market players? An in-depth analysis of these strategies and their impact on competition and growth.
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