Butanes Market: Key Highlights
According to “Butanes Market – Global Industry Size, Market Share, Trends, Analysis, And Forecasts 2019 – 2027”, a new report published by Transparency Market Research (TMR), the global butane market is estimated to reach US$ 156 Billion by the end of 2027, growing from US$ 84.0 Billion back in 2018. The report states that the butanes market will expand at a CAGR of 7.1% in terms of value from 2019 to 2027.
Increasing demand for Liquefied Petroleum Gas (LPG) to Drive Butanes Market Demand
Butanes are primarily used in liquefied petroleum gas (LPG). The demand for butane is directly proportional to the rise in demand for LPG, since two-thirds of the butane produced globally is used in LPG. Presently there are many factors driving the global market for butanes. According to the report, the surging demand for LPG as a domestic fuel in commercial and residential sectors is the major factor attributed to the growth of the global butanes market. The market demand for butane is also fueled by the growing ethylene capacity in the Middle East, since butane is also used as petrochemical feedstock required for producing ethylene and other derivatives. However, fluctuations in the volatile crude oil market and growing regulatory issues owing to environmental concerns have appeared as major hindrances limiting the growth of butanes market.
The rising demand for LPG witnessed by Asia Pacific countries such as China, India, and others provide great opportunities for butane producers. They can set up their SBUs in Asia Pacific and capitalize on the market opportunities and increasing demand registered by the region.
Among the many applications of butanes, LPG accounted for a whopping 66.1% of the butane produced globally in 2018. LPG has also emerged as the fastest growing application for butanes during the forecast period. LPG is primarily used as a heating and cooking fuel in residential and commercial sectors and this segment represents 49% of the overall global demand for LPG. Butanes are also used as blending agents in refineries and feedstock for producing various petrochemicals.
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Need for Efficient Waste Disposal to Aid Growth
According to the report published by TMR, Asia Pacific dominates the butanes market, accounting for almost 42% of the global demand in 2018. The region is closely followed by North America, Middle East North Africa, and Europe region. Moreover, Asia Pacific and the Middle East North Africa region are anticipated to grow at significant pace during the forecast period.
Competitive Landscape: Global Butanes Market
Some of the leading players operating in the global butanes market are Exxon Mobil Corporation, Royal Dutch Shell, China Petroleum Chemical Corporation (Sinopec), British Petroleum Plc, Chevron, Total S.A., Conocophillips, China National Petroleum Corporation (CNPC), Bharat Petroleum Corporation Limited, and Indian Oil Corporation Ltd.
Global Butanes Market – Key Developments
· In November 2019, Wanhua Chemical Group China’s one of the leading petrochemical manufacturer had signed a 10-year FOB term contract with Qatar Petroleum for import of LPG from the latter. Wanhua Chemical Group planned to import around 800,000 mt/year of LPG starting from 2020. The split between butane and propane along with the price of the contract were not made public. Wanhua Chemical Group had also signed a FOB term contract for 10-year with Abu Dhabi National Oil Co. (ADNOC), in November 2018, to import 1 million metric ton of LPG per year starting in 2019.
· In November 2019, Oil and Natural Gas Corporation’s (ONGC) downstream subsidiary Mangalore Refinery and Petrochemicals Limited (MRPL) announced its plan to invest US$ 4,306.9 Mn to expand its flagship 16 Million Tonne Per Annum (MTPA) refinery to 18 MTPA. The company said that it would focus on the integration of production streams for petrochemicals like ethylene, propylene and butane.