The global propylene oxide market is valued at US$ 19.19 billion in 2024 and is likely to reach US$ 31.56 billion by the end of 2034. Propylene oxide sales are likely to grow at a 5.1% CAGR from 2024 to 2034 across the globe. It is a key chemical intermediate used in producing polyether polyols and propylene glycol for the subsequent manufacturing of polyurethanes, lubricants, and other related useful products. With such vast applications across industries like automotive, construction, and textiles, the propylene oxide market has been growing at a rapid pace worldwide. According to recent market analyses from Fact.MR, the propylene oxide market shall further increase during the forecast period on account of growing demand for polyurethane and new production technologies.
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Drivers
Growing Demand for Polyurethanes:
Propylene oxide is the raw material for the production of polyurethanes, used mainly in industries such as automobile, construction, and furniture due to its low weight, strength, and insulation. Growing demand from the automobile sector, with a focus on developing regions, and growing need for energy-efficient buildings are key drivers for the propylene oxide market.
The introduction of new technologies for its production, such as the process of HPPO—Hydrogen Peroxide to Propylene Oxide—has enhanced the efficiency and greenness of propylene oxide production. HPPO reduces the carbon footprint and minimizes by-products; therefore, it is fast becoming a preferred route for manufacturers.
Growth in the Textile Industry:
Textile industries use propylene oxide as raw material in the manufacture of polyester fibers and as fumigant, too. The stable growth of the textile industry, mainly in Asia-Pacific regions, increased demand for propylene oxide.
Market Restraints
Health and Environmental Concerns:
The International Agency for Research on Cancer classified propylene oxide as a probable human carcinogen. Stringent regulations concerning its production, handling, and disposal can challenge market growth. The safety standards by which manufacturers must abide raise the production cost.
Volatility in raw material prices:
Since the major raw material for propylene oxide is propylene, the former's price trend is bound to follow the latter. The price of the propylene, hence the product, might shoot up due to the volatility of the price of crude oil.
Key Companies Profiled
SK Chemicals
BASF SE
AGC Chemicals
LyondellBasell Industries Holdings B.V.
Royal Dutch Shell
Air Products and Chemicals, Inc.
Sumitomo Chemical Co. Ltd.
Huntsman International LLC.
The Dow Chemicals
CSPC Pharmaceutical Group Limited
Tokuyama Corporation
China Petrochemical Corporation
Eastman Chemical Company
Mitsui Chemicals, Inc.
PetroChina International Co.Ltd.
Regional Insights
Asia-Pacific:
The Asia-Pacific region enjoys a dominant position in the propylene oxide market, driven by rapid industrialization and urbanization in countries like China and India. Besides, the powerful automotive and construction industries and significant investments being made in the development of infrastructure act as some of the major drivers. China is one of the largest producers and consumers of propylene oxide; therefore, it has a large stake in regional market dynamics.
North America:
The propylene oxide market in North America is characterized by advanced technologies in production and a well-established end-use industry base. This region benefits from major market participants and innovations in technology. The U.S. is a major market here, driven by a robust automobile industry and growing demand for insulation materials in construction.
Europe is another significant market for propylene oxide, while Germany and France are major consuming countries. Rise in demand for polyurethane products in this region, focusing on sustainability and energy efficiency, directly drives demand for propylene oxide. However, sometimes the strict environmental regulations act as a barrier to further growth in this region.
Future Outlook
With rising demand from polyurethane products, better production technologies, and expanding end-use industries, the propylene oxide market is supposed to continue its growth. However, health and environmental concerns, as well as raw material price fluctuations, pose a challenge to the participants. Embracing sustainability and investing in technological innovation would be the way to go moving forward in this dynamic market.
The prospects for the propylene oxide market look bright in light of the strong demand from different industries around the world. Any company that can handle regulatory compliance and ride on technological changes may turn out to be a key player in this fiercely competitive business.
Competitive Landscape
The global propylene oxide market is highly competitive, with several key players striving to enhance their market presence through strategic initiatives.
In June 2022, Indorama Ventures Public Company Limited (IVL) and Shandong Binhua New Material Co., Ltd., an affiliate of the Befar Group, signed a licensing agreement to construct, own, and operate a co-production facility for propylene oxide (PO), t-butanol (TBA), and t-butyl methyl ether (MTBE). This facility will have the capacity to produce 800,000 tons of butane isomerization, 600,000 tons of propylene, 150,000 tons of synthetic ammonia, 240,000 tons of propylene oxide, and 742,000 tons of MTBE annually.
In January 2021, LyondellBasell Industries Holdings B.V. expanded its partnership with Sinopec by forming a 50/50 joint venture named Ningbo ZRCC LyondellBasell New Material Company Limited. This joint venture will construct a new facility for producing propylene oxide and styrene monomer (SM) to meet the growing demand in the Chinese market.
In December 2021, Chevron Phillips Chemical announced the expansion of its propylene operations at the Cedar Bayou plant in Baytown, Texas, to increase production capacity.
In December 2019, Sumitomo Chemical Co., Ltd. completed the construction of two catalyst production lines at its Chiba Works facility in Ichihara, Chiba. These new lines were established to meet the rising demand for propylene oxide and polypropylene, further advancing Sumitomo's chemical business.
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