Naphtha Market To Hit CAGR Value of 3.4% 2022 |Grand View Research, Inc.

Global naphtha market size was 270.7 million tons in 2014 and is anticipated to grow at a CAGR of 3.4% from 2015 to 2022. Increasing global demand for transportation fuel is expected to drive growth. Demand is also being driven by its robust use for hydrocarbon cracking process in the petrochemical industry.
Naphtha is an essential part of hydrocarbon cracking process, which is conducted under extreme pressure and heat, as it exhibits superior heat resistant properties. Various environmental regulations and region dependent pricing also make the choice for usage of naphtha materials in the production process. The global demand is estimated to be worth USD 183.38 billion by 2022.
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).
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Chemical feedstock was the largest application of naphtha accounting for 65% of the total market share in 2014 and is anticipated to grow at a CAGR of 7.7% over the forecast period. Chemical feedstock is used for steam cracking process which produces gasoline. Growing demand for gasoline is expected to subsequently bolster demand. Lighter grades of the product are used for petrochemical steaming process, which produces rubber, olefins, polymers and aromatics.
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.
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.
Naphtha has emerged as a crucial mainstream chemical which has a broad spectrum of applications. The key application scope includes the utilization of naphtha as an industrial solvent, wherein it is primarily used in formulation of household cleaners, fumes for handheld lighters, oil painting, production of gasoline, shoe polish ingredient, stain remover and more.
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.
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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.
The shale gas boom in North America has transformed petrochemical manufacturers in the US, Canada and Mexico from high-cost producers of key petrochemicals and resins to some of the lowest-cost producers globally, second only to the Middle East, thus replacing the usage of naphtha in fuels. This price drop also increased the distillation of shale resulting in an increase in naphtha production.
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.
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