 "Petrochemical plant image via Shutterstock.")
The global naphtha market will expand at a 5.1 percent CAGR to $ 237.6 billion by 2019 from $ 167.7 billion in 2012, according to a recent Transparency Market Research (TMR) report. This moderate yet positive growth will be the outcome of consistent demand from end-use industries such as plastic, transportation, and construction across the globe. Volume-wise, the market is expected to expand at a 3.2 percent CAGR between 2013 and 2019.
However, the market may face growth limiters owing to the volatile crude oil prices and the abundant availability of cheaper alternatives such as LPG and shale gas.
Demand for naphtha from the global chemicals industry, which is the leading user of naphtha, constituted 60 percent of the overall demand seen by the naphtha market in 2012. The petrochemical industry, which uses naphtha for the production of a variety of petrochemicals, is also a key end user of naphtha.
TMR report states that the demand for naphtha, in terms of volume, is expected to expand at a 3.3 percent CAGR between 2013 and 2019 in the chemicals industry. Over the same timeframe, the market for naphtha is expected to expand at a 5 percent CAGR in the energy and fuel industry. In a number of other industries, naphtha is used for blending gasoline.
The competitive landscape of the global naphtha market features high fragmentation and consists of a vast number of small as well as medium-scale manufacturers. In this highly dynamic marketplace, distribution plays a critical role and is the key to overall success. Most of the key businesses operating in the global naphtha market rely on third party distributors for reaching to their consumers, and only a few big companies have their own distribution and marketing channels spread across the globe.
Geography-wise, the global market for naphtha was led by the regional market of Asia Pacific, which accounted for a massive 40% market share in 2012. The high demand for naphtha in this region is the result of enormous construction and manufacturing activities as well as the rising demand for plastic in industries such as construction, automotives, and electronics.
“The North America regional market for naphtha is expected to expand at a moderate 2.6 percent CAGR, while the Europe market is expected to expand at a 2.1 percent CAGR during 2013-2019. The rising demand for naphtha from the oil and petrochemical industries in these regions will be the chief demand driver in these two regional segments of the global naphtha market,” stated the report.
