Market Trends of Tall Oil Fatty Acid Industry
This section covers the major market trends shaping the Tall Oil Fatty Acid Market according to our research experts:
Increasing Usage in the Automotive Industry
- Tall oil fatty acid is widely adopted in the automotive industry as it enhances the strength and durability of the vehicles. Increased lubrication, consistent quality, and lower cost are some of the benefits of using tall oil fatty acid in vehicles.
- Increasing investments in electric vehicles coupled with increased demand for specialized greases are expected to drive the automotive industry. Besides, the growing demand for vehicles that lower the carbon footprints of the environment will boost the demand for the industry.
- Superior environment-friendly properties of tall oil fatty acid such as no requirement for genetic modification and change in land use pattern enhance its usage in the automotive sector. The global automotive sales reached 80 million in 2021 as compared to 78 million in 2020, registering a growth of 2.56%, according to the International Organization of Motor Vehicle Manufacturers (OICA).
- The growing demand for passenger cars due to the rise in the middle-class population and disposable income are the factors driving the automotive industry. The global passenger car sales reached 56.39 million units in 2021 as compared to 53.92 million units in 2020, registering a growth of 4.6%, which in turn stimulates the demand for the tall oil fatty acid market.
- Moreover, the inceasing demand for automated vehicles and continued preference for personal vehicles as the preferred mode of transportation is expected to boost the demand for lubricants and corrosion inhibitor products that are manufactured by using tall oil fatty acid.
- Owing to all these factors, the market for tall oil fatty acids is likely to grow globally during the forecast period.
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Asia-Pacific Region to Dominate the Market
- The Asia-Pacific region is expected to dominate the market. In the region, China is the largest economy, in terms of GDP. China and India are among the fastest emerging economies in the world.
- China has the largest vehicle market in Asia-Pacific. Growing demand for recreational vehicles, due to the increase in tourism post-pandemic is expected to drive the automotive industry in China. As per the China Self-Driving, Caravan, and Camping Tourism Development Report 2020-2021, around 77.8% of domestic tourists in China used self-driving cars, with an annual growth rate of 14%.
- Increasing disposable income and friendly government policies in China such as made in China initiative 2025 are the factors boosting demand for passenger cars in China. Automotive passenger car production in China amounted to 21.40 million in 2021 and is expected to grow significantly in 2022.
- The construction industry slowed down in India due to restrictions on construction activities during the initial Covid 19 lockdown. However, the construction industry emerged as a top segment during the financial year 2020-21 owing to increased government spending. Hence, this has resulted in increasing demand for construction chemicals, paints, and coatings sector in which tall oil fatty acids are used as drying agents.
- Increasing policy initiatives by the Indian government such as the smart cities mission, housing for all, and 100% FDI under automatic route across several infrastructure sectors. These initiatives are expected to drive the construction industry in the coming years.
- Furthermore, the detergent and soap industry's ongoing product innovation is a major driver of market growth. Customers with sensitive skin prefer natural anti-allergy soap and detergents. The demand for efficient and anti-allergic cleaning chemicals is growing rapidly in the region, fueling market growth.
- Due to all such factors, the market for tall oil fatty acid in the region is expected to have a steady growth during the forecast period.
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