Petrochemical is an umbrella term that is used to classify a number of chemicals that are derived from petroleum. Ethylene, methanol, butadiene, propylene, toluene, xylenes, and benzene are the chemicals that are produced in the most significant volumes in the petrochemical industry. These petrochemicals can be divided into aromatics and olefins, which are used to manufacture many chemical products, and thus are collectively called primary petrochemicals.
A majority of these primary petrochemicals act as raw materials for the manufacture of a wide range of consumer goods. Their applications range from manufacturing of clothes to construction materials, to electronic equipment and household appliances. As a result, the demand for petrochemicals is heavily driven by global economic conditions that directly impact different industrial segments. In addition to this, a closer examination of market dynamics reveals that glycerin is also a major driver for petrochemicals. As a result, the fluctuations in the glycerin market have also impacted the petrochemical production in many ways, thus requiring a detailed glycerin market analysis:
The end-consumers of finished products are now increasingly becoming aware of the benefits of natural ingredients, particularly glycerin, which has benefitted the growth of glycerin market, and by extension, that of petrochemicals as well. As a result, high demand is seen in end-user segments such as personal care, healthcare, pharmaceuticals, etc. In addition to this, the increasing scope of application of glycerin in the production of chemical intermediates will also drive demand for petrochemicals in the coming years.
Growing Preference for Renewable Products:
Since glycerin is also generated through petrochemicals, the growing demand for alternative bio-renewable chemicals in North America and Europe has increased the consumption capacity for glycerin. This increase in demand is further attributed to the growing concerns about global climate change, demand for stable products, which will subsequently drive petrochemical production in the coming years.
Growing Cosmetic Sector:
Glycerin is extensively used in the manufacturing of cosmetic products to enhance skin’s moisture content and smoothness. As a result, it is used as an active ingredient in face moisturizers, sunscreens, body lotions, hair care, makeup, and shaving creams, etc. It also acts as a humectant to prevent premature moisture loss and also has a cooling after-effect on the skin. The growing awareness regarding skin challenges and the ever-increased need of maintaining an even skin tone has increased the demand of glycerin-based products, which in turn is driving petrochemical sales.
Other factors impacting the global petrochemical industry include:
Difference in Production Capacities:
One of the most significant factors driving petrochemical production is the fact that many world-scale petrochemical plants constructed during the past years are significantly larger than those that were built about a decade ago. Consequently, older and less efficient units are now either being shut down or expanded to accommodate the increased demand.
Crude Oil Prices:
The prices for crude oil have been on a constant rise since 2004; however crude oil prices began experiencing a slowdown in the mid-2015. This was due to the reduction in global demand as oil production in non-OPEC countries grew significantly. This fluctuation in crude oil prices has led to an uncertainty in the market, which in turn has impacted the downstream and upstream investments in the petrochemical industry.
The growing concerns over the consumption and supply of fossil fuels and their impact on the overall ecological sustainability have led to the implementation of specific environmental protection laws globally. These laws are anticipated to have a direct effect on the production and general processing of petrochemicals in the coming years.
The manufacturing processes introduced in recent years have significantly altered the manner in which petrochemicals are manufactured. This has caused a replacement of raw materials and consequent shifts in the ratio of products manufactured. As a result, there is a glaring imbalance in the supply and demand, especially for smaller petrochemical derivatives. Further, the shift in prices and environmental concerns have also accelerated the commercialization and development of renewable petrochemical products.
Glycerin has its application in industrial as well as chemical end-user products, all of which utilize petrochemicals for manufacturing. Based on end-user industries, the market is segmented into pharmaceuticals, food, and beverages, automotive, etc. The extensive use of glycerin in many end-user industries coupled with its compliance with sustainable development goals has established it as a promising market for the coming years. Consequently, the increased demand for glycerin coupled with fluctuations in crude oil prices is expected to further drive the demand for petrochemicals in the coming years.