Naphtha Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Naphtha Market is Segmented by Type (Light Naphtha and Heavy Naphtha), End-user Industry (Petrochemical, Agriculture, Paints and Coatings, Aerospace, and Other End-user Industries), and Geography (Asia Pacific, North America, Europe, South America, and Middle-East and Africa). The report offers market size and forecasts for naphtha in volume (kilo metric tons) for all the above segments.

Market Snapshot

Naphtha Market Overview
Study Period: 2016 - 2026
Base Year: 2020
Fastest Growing Market: Asia Pacific
Largest Market: Asia Pacific
CAGR: >4 %

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Market Overview

The global naphtha market is projected to register a CAGR of more than 4% during the forecast period (2021-2026).

The global naphtha market is severely impacted by the COVID-19 pandemic. The pandemic has significantly affected the growth of the construction industry. The lockdown imposed in response to the pandemic has disrupted the supply chain of construction materials. It also caused a major shortage of workforce. Several major construction projects have been shut down for a significant amount of time, which led to a decrease in demand for paints and coatings and their additives, thus, hindering the market growth rate of naphtha. Similarly, the aerospace industry has been severely affected by the COVID-19 pandemic. The pandemic has resulted in strict travel bans worldwide for a significant period, which has drastically reduced air traffic. This trend is negatively affecting the demand for new airplanes. Therefore, paints and coatings are needed for manufacturing them, in turn, decreasing the demand for naphtha. According to the International Air Transport Association (IATA), the full-year air traffic in 2020 was approximately 54% lower than in 2019.

  • Over the medium term, the growth of the naphtha market is likely to be driven by the rising demand for naphtha as a feedstock in the petrochemical Industry. Additionally, the rising demand for fertilizers in India is likely to boost the demand for naphtha in the future.
  • The major driver of the market studied is the rising demand for fertilizers in India. Moreover, due to rapid industrialization and urbanization in countries, like China, India, and Japan, the transportation sector is growing, which has stimulated the demand for gasoline, thus, driving the demand for the naphtha market.
  • The demand for natural gas liquid in the United States is expected to hinder the growth of the naphtha market.
  • With the increasing demand for naphtha coming from fast-developing countries, such as China, India, and Japan, the Asia Pacific region is expected to dominate the global market.

Scope of the Report

Naphtha is a light flammable liquid containing a mixture of hydrocarbon molecules, typically with between 5 and 10 carbon atoms. It mainly consists of straight-chain alkanes (paraffin), but it may also contain cyclohexanes (naphthenes) and aromatics. The naphtha market is segmented by type, end-user industry, and region. By type, the market is segmented into light naphtha and heavy naphtha. By end-user industry, the market is segmented into petrochemical, agriculture, paints and coatings, aerospace, and other end-user industries. The report also covers the market size and forecasts for the naphtha market in 15 countries across major regions. For each segment, the market sizing and forecasts have been done based on volume (kilo metric tons).

By Type
Light Naphtha
Heavy Naptha
By End-user Industry
Petrochemical
Agriculture
Paints and Coatings
Aerospace
Other End-user Industries
By Geography
Asia Pacific
China
India
Japan
South Korea
Rest of Asia Pacific
North America
United States
Canada
Mexico
Europe
Germany
United Kingdom
Italy
France
Rest of Europe
South America
Brazil
Argentina
Rest of South America
Middle-East and Africa
Saudi Arabia
South Africa
Rest of Middle-East and Africa

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Key Market Trends

Rising Demand from Petrochemical Industry

  • Naphtha is used in various industries as light naphtha and heavy naphtha. Naphtha is majorly used in the petrochemical industry as feedstock. Around 50% of the naphtha produced is being used in the petrochemical industry.
  • In the petrochemical industry, naphtha is used for manufacturing aromatics and olefins, like benzene, butadiene, ethylene, toluene, and propylene. Continuous growth in the industry has been proactive in maintaining the growth of the naphtha market.
  • Olefin-rich naphtha is mainly used as a feedstock for processing cost-effective high-octane diesel. Naphtha consumption has risen in both emerging and industrialized economies due to the increasing demand for cost-effective fuel due to rapid urbanization and a growing global population.
  • Consumption and production of naphtha are majorly growing in fast-developing economies, such as India, China, and ASEAN countries, etc. For instance, the Malaysian petrochemical industry has been growing rapidly in recent years, with a huge amount of FDIs flowing into the country. A Malaysian national oil and gas company, Petronas, along with Saudi Aramco, announced the establishment of two joint ventures for the Refinery and Petrochemicals Integrated Development (RAPID) project in Johor, worth USD 7 billion. The collaboration mentioned above resulted in the construction of a refinery, with a capacity to process 300,000 barrels of crude oil per day, and six petrochemical plants with a combined annual output of more than 3.5 million metric ton.
  • Additionally, investments have been increasing in the US petrochemical industry, thus, boosting the demand for the market studied. To increase production, 13 new polyethylene plants started their production between 2017 and 2019. Furthermore, some more plants started production by the end of 2020, increasing the capacity by another ~26%, to 34.35 MTPA. However, some of the plants are expected to be delayed, as they are currently on hold due to the recent COVID-19 pandemic in the country.
  • Hence, the factors mentioned above are likely to increase the demand for naphtha for various applications in the end-user industries. Thus, this is expected to drive the demand for naphtha during the forecast period.
Naphtha Market Share

Asia Pacific to Dominate the Market

  • The Asia Pacific region dominated the global market share. Owing to the growth in various end-user industries, such as petrochemical, fertilizers, and paints and coatings, among others, the demand for naphtha has been continuously rising in countries, such as China, India, and Japan.
  • Numerous chemical plants are lined up for construction within the period of the next five years in China, which is likely to boost up the demand for naphtha. For instance, in November 2019, BASF started construction of its USD 10 billion integrated petrochemicals project, located in the southern province of Guangdong in China. The plant is expected to produce various plastics, along with other petrochemical products used in industries, such as automotive, electronics, and new energy vehicles.
  • The country’s paints and coatings industry has been pushing forward with a number of new production plants since 2019. For instance, Nippon is tapping into new technologies by upgrading its coatings production processes in China. The company’s new plant in Xianning, Hubei province, is based on the standards of Industry 4.0, which require only 50 workers to produce about 200 thousand metric tons per year. This plant is expected to expand to 300 thousand metric tons in the future, which is likely to stimulate the demand for naphtha in the paints and coatings sector in the country.
  • In Union Budget 2021-2022, the Indian government reduced the customs duty for naphtha from 4% to 2.5%. Decreased custom duty on naphtha is likely to further improve the utilization of crackers resulting in the availability of cost-competitive olefins and aromatics. Low-cost naphtha will also make a way into the availability of ethylene and propylene for petrochemical intermediates in the value chain.
  • According to the World Fertilizer Magazine, the overall fertilizer consumption in India has grown at a CAGR of 2.0%, from 50.6 million tons in FY2009 to 61.4 million tons in FY2020. In FY2020, the primary sales volumes for fertilizers grew at a moderate rate of 6.0% to 61.4 million tons in FY2020 from 57.8 million tons in FY2019. Urea sales grew by 5.9% to 33.6 million tons in FY2020 from 31.7 million tons in FY2019, thereby, driving the market demand.
  • Several new paints and coatings production plants have commenced operations in Indonesia. TOA paints, one of the leading paints and coatings producers in Thailand, constructed a new paints and coatings production plant, with a building area of around 32,000 square meters and a total capacity of approximately 7.7 million gallons per annum, in Indonesia. This plant commenced operation in late 2019 to cater to the local market, which has enhanced the demand for naphtha.
  • The growth trend of the market is likely to remain the same in the next few years, which will drive its growth in the region.
  • Moreover, the naphtha market in Asia Pacific is expected to witness the highest CAGR during the forecast period.
Naphtha Market Growth By Region

Competitive Landscape

The naphtha market is partially consolidated in nature. In terms of market share, few players currently dominate the market. Key players in the market include Reliance Industries Limited, Exxon Mobil Corporation, Saudi Arabian Oil Co. (Saudi Aramco), Formosa Petrochemical Corporation, and LG Chem.

Recent Developments

  • In 2019, Saudi Arabian Oil Co. (Saudi Aramco) launched a USD 2.6 billion projects, named the Ras Tanura refinery clean fuels and aromatics project, to improve the environmental friendliness of the plant. Expansion project completed the installation of a naphtha splitter column in October 2019. The function of the naphtha splitter column is to split the hydrotreated naphtha into light and heavy naphtha. The column is the main feeder to the continuous catalytic reforming (CCR) and isomerization units, which have an operating capacity of 90,000 and 65,000 barrels per day, respectively.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Drivers

      1. 4.1.1 Increasing Demand for Petrochemicals in Asia Pacific

      2. 4.1.2 Rising Demand for Fertilizers in India

    2. 4.2 Restraints

      1. 4.2.1 Natural Gas Liquid Demand in the United States

      2. 4.2.2 Impact of the COVID-19 Outbreak

    3. 4.3 Industry Value Chain Analysis

    4. 4.4 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.4.1 Bargaining Power of Suppliers

      2. 4.4.2 Bargaining Power of Consumers

      3. 4.4.3 Threat of New Entrants

      4. 4.4.4 Threat of Substitute Products and Services

      5. 4.4.5 Intensity of Competitive Rivalry

    5. 4.5 Feedstock Analysis

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Type

      1. 5.1.1 Light Naphtha

      2. 5.1.2 Heavy Naptha

    2. 5.2 By End-user Industry

      1. 5.2.1 Petrochemical

      2. 5.2.2 Agriculture

      3. 5.2.3 Paints and Coatings

      4. 5.2.4 Aerospace

      5. 5.2.5 Other End-user Industries

    3. 5.3 By Geography

      1. 5.3.1 Asia Pacific

        1. 5.3.1.1 China

        2. 5.3.1.2 India

        3. 5.3.1.3 Japan

        4. 5.3.1.4 South Korea

        5. 5.3.1.5 Rest of Asia Pacific

      2. 5.3.2 North America

        1. 5.3.2.1 United States

        2. 5.3.2.2 Canada

        3. 5.3.2.3 Mexico

      3. 5.3.3 Europe

        1. 5.3.3.1 Germany

        2. 5.3.3.2 United Kingdom

        3. 5.3.3.3 Italy

        4. 5.3.3.4 France

        5. 5.3.3.5 Rest of Europe

      4. 5.3.4 South America

        1. 5.3.4.1 Brazil

        2. 5.3.4.2 Argentina

        3. 5.3.4.3 Rest of South America

      5. 5.3.5 Middle-East and Africa

        1. 5.3.5.1 Saudi Arabia

        2. 5.3.5.2 South Africa

        3. 5.3.5.3 Rest of Middle-East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements

    2. 6.2 Market Share (%)**/ Ranking Analysis

    3. 6.3 Strategies Adopted by Leading Players

    4. 6.4 Company Profiles

      1. 6.4.1 AMOC (Alexandria Mineral Oils Co.)

      2. 6.4.2 BP PLC

      3. 6.4.3 Chevron Phillips Chemical Company LLC

      4. 6.4.4 China National Petroleum Corporation (CNPC)

      5. 6.4.5 China Petroleum & Chemical Corporation (SINOPEC)

      6. 6.4.6 Exxon Mobil Corporation

      7. 6.4.7 Formosa Petrochemical Corporation

      8. 6.4.8 LG Chem

      9. 6.4.9 MGTPetroil.com

      10. 6.4.10 PetroChina Company Limited

      11. 6.4.11 Petroleos Mexicanos

      12. 6.4.12 Reliance Industries Limited

      13. 6.4.13 Royal Dutch Shell PLC

      14. 6.4.14 SASOL

      15. 6.4.15 SABIC

      16. 6.4.16 Saudi Arabian Oil Co. (Saudi Aramco)

    5. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The Naphtha Market market is studied from 2016 - 2026.

The Naphtha Market is growing at a CAGR of >4% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

Asia Pacific holds highest share in 2020.

Are the major companies operating in Naphtha Market.

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