Propyl Benzene Market Size (2024 – 2030)

The global Propyl Benzene Market witnessed a valuation of $22.7 billion in 2023, and forecasts indicate a growth to $30.47 billion by 2030. Over the forecast period spanning 2024-2030, the market is expected to exhibit a Compound Annual Growth Rate (CAGR) of 4.3%. A significant driver for this growth is the utilization of Propyl benzene in the automotive sector for tire production.

INDUSTRY OVERVIEW

Benzene, with the chemical formula C6H6, is a colorless and highly flammable liquid with a strong, gasoline-like odor. It is predominantly a by-product of oil refining and is also found in cigarette smoke, crude oil, and gasoline. Despite its wide industrial applications, its toxic nature limits its non-industrial use. Benzene has been classified as a carcinogen, posing potential health risks with prolonged exposure. While benzene was once commonly used in decaffeinating coffee and metal cleaning, safer alternatives have now replaced its use.

A key factor driving market growth is the increasing demand for insulation materials in construction projects. Moreover, the global demand for consumer goods such as furniture wax and thinners has risen due to urbanization and higher disposable incomes. Benzene also plays a crucial role as a solvent in various industries and scientific endeavors. Alkyl benzene, for instance, is a common ingredient in surfactants used for detergent production. Additionally, cyclohexane, a benzene derivative, serves as a fundamental component in creating nylon for textile manufacturing. The expanding paints and coatings industry also contributes significantly to the growth, utilizing benzene derivatives in the production of paints and lacquers.

N-propyl benzene, formed when one hydrogen atom in benzene is replaced with a propyl group, is a denser, colorless, or light yellow liquid. It is generally insoluble in water and poses toxicity risks if ingested or inhaled. With a boiling point of 86°F, it is highly flammable. Various methods can be employed to produce N-propylbenzene, including fractional distillation of petroleum reformate, alkylation of N-propyl chloride with benzene using aluminum chloride, reaction of diethyl sulfate with benzyl magnesium chloride, and analytical laboratory approaches or OSHA chemical sampling.

COVID-19 IMPACT ON THE PROPYL BENZENE MARKET

The outbreak of COVID-19 and subsequent economic downturns significantly affected the petrochemical sector. China, a dominant player in petrochemical production, faced limitations on its industrial capacities due to measures aimed at containing the virus. Being the epicenter of the outbreak, China's manufacturing slowdown disrupted global supply chains, impacting industries reliant on Chinese imports. Lockdowns, mobility restrictions, and economic uncertainties during the pandemic's early stages severely disrupted supply chains and delayed major industrial projects. The pandemic, combined with trade tensions between the United States and China, weakened the market, leading to shifts in demand, production interruptions, and logistical delays for manufacturers.

The early stages of the pandemic saw a crash in crude oil prices, particularly affecting oil-producing nations like those in North America and the Middle East. However, this situation provided countries such as South Korea, India, and China—net importers of oil—an opportunity to build strategic crude oil reserves for their petrochemical industries. As major economies globally recover from the COVID-19 shock, increased demand is observed from industries such as healthcare, packaging, and electronics, which is expected to continue during the forecast period. China, in particular, has significantly enhanced its capacity for producing benzene derivatives like styrene, influencing market dynamics for the foreseeable future.

MARKET DRIVERS:

Rising Industrial Applications Driving Market Growth

Propyl benzene finds applications in various products, including dyes, detergents, and agrochemicals, serving as a solvent and essential component in manufacturing processes. Altering functional groups in benzene allows for the production of diverse chemicals such as xylene, ethylbenzene, and nitrobenzene. In 2021, India's chemical exports reached an estimated $29.3 billion, positioning it as the sixth-largest contributor to global chemical output. The expanding industrial applications of propyl benzene are thus propelling overall market growth.

Increasing Demand for Styrene Polymers from Diverse Industries

Propyl Benzene, a colorless liquid, plays a vital role in the production of methyl styrene, textile dyeing and printing, and as a solvent for cellulose acetate. Polymerized or co-polymerized styrene finds applications in construction, automotive, packaging, and electronics sectors. Polystyrene, a polymerized form of styrene, is extensively used in the packaging industry due to its durability, lightweight, flexibility, and moisture resistance. Countries like India and China have witnessed rapid growth in e-commerce over the past decade, driven by increased purchasing power and accessibility through platforms like Alibaba, Amazon, and Flipkart. India's online retail demand is expected to represent 37% of its organized retail market by 2030, as per the National Investment Promotion and Facilitation Agency. The projected growth in the packaging industry, alongside the e-commerce sector, is anticipated to fuel market expansion.

MARKET RESTRAINTS:

Impact of Fluctuating Crude Oil Prices

The propyl benzene market, reliant on crude oil for production, faces challenges due to the volatile nature of crude oil prices. The market for propyl benzene and its derivatives is significantly constrained by the impact of rising crude oil costs and overall price volatility amidst the current economic scenario. Recent years have seen increasing volatility in crude oil prices, such as the drop from $98.95 in 2014 to $52.39 in 2015, followed by a rise from $43.73 in 2016 to $71.31 in 2018.

Hazardous Properties of Propyl Benzene

Propyl benzene's toxic nature presents a significant hurdle for market growth. Its low flashpoint and strong flammability make it explosive, while contact or inhalation can lead to poisonous, mutagenic, and carcinogenic effects. These factors impact the growth prospects of the propyl benzene market and its derivatives.

PROPYLENE BENZENE MARKET – BY APPLICATION

• Industrial Chemicals
• Automobile Industry
• Oil and Gas
• Rubber and Plastics
• Pharmaceuticals
• Other Industries

In terms of application, the propylene benzene market is segmented into Industrial Chemicals, Automobile Industry, Oil and Gas, Rubber and Plastics, Pharmaceuticals, and Other Industries. Among these, the automobile industry dominated the market share. Propylene Benzene is utilized in the production of styrene, a crucial component in the automobile industry. Styrene-butadiene rubber (SBR), a styrene copolymer used for manufacturing tires, has found extensive application in the automobile sector. The automobile industry is anticipated to witness significant growth throughout the forecast period, particularly in developing countries such as China and India. Tires have no substitutes and will continue to be in demand as the automobile industry transitions from gasoline or diesel-powered vehicles to electric cars. According to NitiAayog, India has only 22 automobiles per 1,000 inhabitants, significantly lower than China, the United Kingdom, and the United States. Additionally, research by the International Energy Agency (IEA) forecasts a 775 percent increase to 175 automobiles per 1,000 people by 2040. This market growth will be driven by the tire industry, expanding alongside the automotive sector in various regions worldwide.

PROPYLENE BENZENE MARKET - BY REGION

• North America
• Europe
• Asia Pacific
• Latin America
• The Middle East
• Africa

Regionally, the Propylene Benzene Market is categorized into North America, Europe, Asia Pacific, Latin America, The Middle East, and Africa. The Asia Pacific region holds a significant market share in the domestic consumption and export of benzene and its derivatives, including propylene benzene. The International Council of Chemical Associations estimates that the chemical sector in Asia and the Pacific contributed around USD 2.3 trillion to the global GDP in 2020, representing about 45% of the total. It is projected that the local chemical sector will witness further growth over the forecast period. The synthesis of benzene and its derivatives is widely practiced across various application sectors such as rubber and plastics, adhesives, paints, pharmaceuticals, and petrochemicals. These application sectors are expected to expand to meet the growing consumer demand, particularly in emerging economies like India and China, thereby propelling industry growth.

North America is expected to witness considerable growth due to the burgeoning petrochemical industry. The production of benzene and its derivatives, a widely used feedstock in the petrochemical sector for the synthesis of various chemicals, primarily involves the catalytic reforming and steam cracking of crude oil. The upstream petroleum industry in the region has witnessed significant growth over the past decade due to technological advancements, especially the hydraulic fracturing method for extracting shale oil. With the region's oil and gas production outpacing domestic fuel demand, investors are focusing on value addition and the development of new petrochemical complexes. The increasing demand in the petrochemical industry and the availability of surplus crude oil are expected to drive market expansion.

Europe, on the other hand, is anticipated to witness gradual growth due to stringent regulations governing the use of benzene and its derivatives in consumer products. Styrene and phenol are gaining popularity due to rising demand from the plastics, pharmaceutical, and automobile sectors. The regional market is well-established, and the demand for benzene and its derivatives is expected to remain steady. However, the growth of the regional market may be hindered by the stringent regulations imposed by the European Chemicals Agency (ECHA) and other regulatory bodies.

PROPYLENE BENZENE MARKET - BY COMPANIES

Some of the key players operating in the Propylene Benzene Market include:

1. Basf se
2. China petrochemical corporation
3. Royal dutch shell plc.
4. China national petroleum corporation
5. Dow
6. Sabic
7. Exxon mobil corporation
8. Ineos group ltd.
9. Chevron phillips chemical company llc.
10. Mitsubishi chemical corporation
11. Lyondellbasell industries holdings b.v.
12. Maruzen petrochemical co., ltd.
13. Reliance industries limited

NOTABLE DEVELOPMENTS IN THE PROPYLENE BENZENE MARKET

• EXPANSION - In February 2021, Hengyi Petrochemical announced plans to construct a benzene facility as part of its refining and petrochemical development project on PulauMuaraBesar in Brunei. This expansion aims to increase annual capacity from 500 kilotons to 800 kilotons, thereby enhancing the corporation's petrochemical division. The plant will also facilitate the production of other benzene derivatives.
• EXPANSION - As of April 2021, Iran achieved self-sufficiency in benzene supply, with the Bu Ali Sina Petrochemical Plant reaching full production capacity in March 2020.
• COLLABORATION - In February 2021, Honeywell announced its provision of licenses and solution designs to Hengyi Industries for the utilization of advanced reforming and aromatics technology. Hengyi Industries will employ Totray technology, nearly doubling benzene production capacity.