Benzene and its Derivatives Market Size, Share & COVID-19 Impact Analysis, By Derivatives (Ethylbenzene, Cumene, Cyclohexane, Alkylbenzene, and Others), By Application (Industrial Chemical, Oil and Gas, Rubber and Plastics, Pharmaceutical, and Others), and Regional Forecast, 2021-2028

The global benzene and its derivatives market size was USD 25.4 billion in 2020 and is projected to grow from USD 34.6 billion in 2021 to USD 53.5 billion in 2028 at a CAGR of 6.4% during the 2021-2028 period. Asia Pacific dominated the benzene and its derivatives market with a market share of 24.41% in 2020.

The impact of COVID-19 has been unprecedented and staggering, with benzene and its derivatives witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 22.9% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Benzene is an important feedstock used to manufacture various chemicals and serve different industries including textile, automotive, building & construction, and electrical & electronics. Some industries use benzene to make other chemicals that are used to make nylon, plastics, synthetic fibers, and resins. The product is also used to make some types of dyes, rubbers, lubricants, pesticides, detergents, and drugs. The growing chemical industry and increasing demand for polymers shall drive the benzene and its derivatives market growth.

COVID-19 IMPACT  

Detrimental Effect on Petrochemical Industry Impacted Benzene Demand

The outbreak of COVID-19, and the accompanying economic slowdown, had a detrimental effect on the petrochemical industry. China accounts for a significant market share in the production of petrochemicals. China was the epicenter of the outbreak, and the restrictions enforced to prevent the virus from spreading had a significant impact on the country’s production facilities, resulting in a reduced capacity or even total shutdown. The reduction in Chinese production sent shockwaves through the supply chain, affecting industries that rely on Chinese imports. Lockdowns, movement restrictions, and economic uncertainty during the early stages of the pandemic caused serious supply chain disruption and delays in numerous industrial projects. The pandemic's restrictions, along with trade conflicts between the U.S. and China, caused substantial market instability, with manufacturing companies witnessing drastic shifts in demand, production downtime, and logistical delays.

During the early stages of the pandemic, crude oil prices plummeted, putting oil-producing regions like North America and the Middle East at a disadvantage. However, it enabled oil-importing countries like South Korea, India, and China the opportunity to build strategic crude oil reserves for their petrochemical industries. Demand from Application sectors such as health care, packaging, and electronics has begun to rise as major economies across the globe have begun to recover from the shock caused by COVID-19, and is expected to continue during the forecast period. China has significantly increased its manufacturing capacity for benzene derivatives such as styrene during this time, which is expected to result in significant changes in market dynamics during the forecast period.

LATEST TRENDS

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Styrene Production Process to Get Greener and Cheaper is a Key Trend for Market Growth

In March 2021, Researchers from North Carolina State University developed a new catalyst that significantly increases yield in styrene manufacturing, while simultaneously reducing energy consumption and Greenhouse Gas (GHG) emissions. The conversion process occurs at about 500-600 degrees Celsius, which is comparable to conventional processes. However, the researchers claim that the novel process provides a yield of 91%, which is substantially greater than the yield of 54% produced in conventional processes. This can significantly reduce the process's carbon footprint since the same conversion can be achieved with less fuel. The novel process addresses rising environmental concerns and the trend for using environmentally friendly production methods. Manufacturers are likely to shift to more environmentally friendly methods like these as governments across the world enforce stricter environmental regulations.

DRIVING FACTORS

Increasing Demand for Styrene Polymers from Various End-Use Industries to Drive Market Growth

Styrene, in polymerized or co-polymerized form, is utilized in a wide range of industries, including construction, automotive, packaging, and electronics. The majority of styrene produced globally is used to manufacture polystyrene, a polymerized version of styrene that comes in solid, foam, and film forms. Polystyrene is widely utilized in the packaging industry due to its excellent resilience, lightweight, flexibility, and moisture resistance. In the past decade, emerging economies such as India and China have seen significant growth in the e-commerce sector. This expansion is likely to continue as a result of increased purchasing power and enhanced accessibility offered by e-commerce companies such as Alibaba, Amazon, and Flipkart.

India has one of the fastest-growing e-commerce industries in the world. According to the National Investment Promotion and Facilitation Agency, India's online retail business is anticipated to account for 37% of the total organized retail sector by 2030. Better internet and smartphone penetration, as well as innovative marketing strategies, are likely to attract more customers to shop online. As the e-commerce sector is anticipated to expand during the forecast period, the packaging industry is expected to expand simultaneously, driving the market growth.

The automotive industry has been a major consumer of styrene-butadiene rubber (SBR), a styrene copolymer that is used to manufacture tires. During the forecast period, the automotive industry is anticipated to expand substantially, particularly in emerging economies such as India and China. As the automotive industry transitions from gasoline or diesel-powered vehicles to electric vehicles, the tire has no alternative and will continue to exist. According to the Niti Aayog, India has just 22 cars per 1,000 people, which is much fewer than China, the United Kingdom, and the United States. Furthermore, according to a study published by the International Energy Agency (IEA), this figure is anticipated to rise to 175 cars per 1,000 citizens by 2040, representing a 775% growth. The expansion of the automobile sector in different regions of the world is anticipated to augment tire industry expansion, which will drive this market.

RESTRAINING FACTORS

Harmful Effects of Benzene Exposure to Hinder Market Growth

Rising health and environmental problems, pertaining to benzene exposure is likely to restrict market expansion. The International Agency for Research on Cancer (IARC) has categorized benzene as carcinogenic to humans. Short-term exposure can cause narcosis, eye irritation, and skin irritation, while long-term exposure can cause serious health problems such as anemia, lowered immunity, and cancer. According to the OSHA benzene standards, the maximum time-weighted average (TWA) exposure limit is 1 ppm for an 8-hour workday and the maximum short-term exposure limit is 5 ppm for 15 minutes. These standards are followed in the U.S. and the UK, and Europe has its own set of comparable standards, which manufacturers must rigorously adhere to ensure worker’s safety. Benzene-derived polymers and resins, like other synthetic polymers, have a degradability problem, resulting in plastic pollution. Due to increased consumer awareness, the demand for eco-friendly alternatives to these styrene polymers has been rising steadily. Stricter health and environmental regulations are likely to limit the Derivatives usage, thus restricting the overall market growth.

SEGMENTATION

By Derivatives Analysis

Ethylbenzene Segment to Dominate Market  

Based on derivatives, the market is segmented into ethylbenzene, cumene, chlorobenzene, alkylbenzene, and others.

The ethylbenzene segment accounted for the major share of global benzene and its derivatives during the forecast period. The petrochemical industry uses a significant amount of ethylbenzene as a precursor to manufacture styrene, which is used to make polystyrene. Polystyrene is a versatile polymeric material that is utilized in a variety of end-use industries including packaging, construction, rubber, automotive, and electronics. Ethylbenzene has a high octane rating and is used in gasoline as an anti-knocking agent. However, due to its carcinogenic nature, several regulatory agencies have placed stringent restrictions on its usage. In addition, the product is widely used is used in paints, inks, insecticides, and tobacco industries.

Cumene accounted for the fastest growing CAGR during the forecast period. Cumene is subsequently utilized in various industrial production processes to synthesize polymers and resins including polystyrene, phenol-formaldehyde, and polycarbonates. Cumene has few direct applications, but the compounds derived from it have a variety of applications in industries such as plastics, synthetic rubber, and coatings. Additionally, because of its high solubility, it is used as a thinner for paints, lacquers, and enamels.

By Application Analysis

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Industrial Chemical Segment to Account for Major Share during Forecast Period

Based on application, the market is segmented into industrial chemical, oil & gas, rubbers & plastics, pharmaceutical, and others.

The industrial chemical may account for a major share during the forecast period. Most of the industries uses benzene and its derivatives to make chemicals, which can be used in the plastic, resins, and nylon.

Many pain relievers contain benzene derivatives, this includes analgesic drugs like aspirin, ibuprofen, naproxen, and rofecoxib among others which are used to relieve pain, reduce fever and inflammation. Phenylpropanolamine, which is derived from benzene, has been used as a decongestant to relieve nasal congestion. However, the U.S. FDA has issued a public notice about the compound owing to the discovery of side effects such as the increased risk of strokes in patients. Apart from that, due to its ease of sterilization, polystyrene is often used in the health care industry to manufacture medical equipment. Few of the medical devices manufactured using polystyrene include test kits, test tubes, petri dishes, and diagnostic components, among others.

Styrene is a derivative used extensively in the production of Styrene-Butadiene Rubber (SBR). SBR is primarily utilized in the production of tires for cars and lightweight vehicles. SBR offers unique properties such as low rolling friction, high traction during braking, and abrasion resistance, making it an ideal material to meet the high performance and durability demands of the tire industry. Aside from tires, SBR is used to manufacture conveyor belts, hoses, gaskets, wire insulation, and shoe soles.

REGIONAL INSIGHTS

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Asia Pacific accounts for a major market share in terms of domestic consumption and export of benzene and its derivatives. According to the International Council of Chemical Associations, Asia Pacific's chemical industry contributed approximately USD 2.3 trillion to global GDP in 2017, accounting for around 45 percent of the global chemical sector's contribution. The regional chemical industry is anticipated to expand further during the forecast period. Many Application industries, such as rubber & plastics, adhesives, paints, pharmaceuticals, and petrochemicals, employ benzene and its derivatives in their production processes. Since these Application industries are anticipated to expand to meet rising consumer demand, particularly in emerging economies such as India and China, this driving the industry growth.

North America is expected to witness a significant growth rate owing to rising demand from expanding petrochemical sector. Benzene is a commonly utilized feedstock in the petrochemical industry for the manufacture of a wide range of chemicals, and it is produced primarily by catalytic reforming and steam cracking of crude oil. The region's upstream petroleum sector has expanded significantly in the last decade because of technological breakthroughs, especially shale oil extraction through hydraulic fracturing. Since the region is an oil & gas production has surpassed domestic fuel demand, investors are focusing their efforts on value addition and the construction of new petrochemical complexes. Rising demand from expanding petrochemical sector, as well as the availability of surplus crude oil, are anticipated to augment the market growth.

Europe is anticipated to expand steadily as a result of tight regulations governing the use of benzene and its derivatives in consumer goods. Demand for styrene and phenol is increasing due to the rise in demand from the automotive, pharmaceutical, and plastics industries. The regional market is mature, and demand for benzene and its derivatives is anticipated to stay stable. However, European Chemicals Agency (ECHA) and other regulatory organizations’ strict restrictions are likely to limit the regional market growth.

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Latin America and Middle East & Africa regions are expected to witness sluggish growth owing to their poorly developed chemical industries. The Middle East is anticipated to expand during the forecast period owing to enhanced investment in the petrochemical industry. According to the International Energy Association, the petrochemical industry will be a major oil consumer during the forecast period. Oil-producing countries such as Saudi Arabia, are aware of this fact and are investing significantly in expanding their domestic petrochemical sector to gain a share of this rising market. Anticipating a transition in oil consumption from fuel to the petrochemical industry, the petrochemical sector is expected to attract high investments and expand, this, in turn, is likely to drive the market growth for benzene & its derivatives.

KEY INDUSTRY PLAYERS

Key Players Are Forming Strategies to Maintain Their Market Position

The global benzene and its derivatives market share is consolidated in nature with few prominent players engaged in the industry. Most of the market participants are engaged in R&D activities to explore new product development to increase the product demand. In addition, most companies are implementing various marketing strategies to gain a competitive edge in the industry. In addition, most of the products manufactured comply with government regulations.

• In December 2020, Researchers from KAUST in collaboration with Saudi Aramco developed a sensor that accurately senses extremely low concentrations of benzene in real-time.  The laser-based sensor outperforms current devices in terms of selectivity and sensitivity towards benzene, with a detection limit of 2 parts per billion. The sensor is robust enough for field applications and can take readings in seconds without any pre-calibration.


• In March 2020, in collaboration with researchers at the University of Oxford, Petra Vasko of the University of Jyväskylä demonstrated that the carbon-carbon chemical bond in benzene can be opened and the intermediate products isolated using an anionic aluminum compound. Benzene's carbon bonds were ruptured, and aluminum was introduced into the benzene ring, resulting in a seven-membered heterocycle. This reaction is regarded as a milestone because converting chemically stable benzene into more complex chemicals has the potential to revolutionize

LIST OF KEY COMPANIES PROFILED:

• BASF SE (Ludwigshafen, Germany)


• China Petrochemical Corporation (Beijing, China)


• Royal Dutch Shell Plc. (The Hague, Netherlands)


• China National Petroleum Corporation (Beijing, China)


• Dow (Michigan, U.S.)


• SABIC (Riyadh, Saudi Arabia)


• Exxon Mobil Corporation (Texas, U.S.)


• Ineos Group Ltd. (London, U.K.)


• Chevron Phillips Chemical Company LLC. (Texas, U.S.)


• Mitsubishi Chemical Corporation (Tokyo, Japan)


• LyondellBasell Industries Holdings B.V. (Texas, U.S.)


• Maruzen Petrochemical Co., Ltd. (Tokyo, Japan)


• Reliance Industries Limited (Mumbai, India)

KEY INDUSTRY DEVELOPMENTS:

• April 2021 – Iran achieved self-sufficiency in benzene production. According to a statement from the Iranian Oil Ministry, the Iranian petrochemical industry now completely meets domestic demand for benzene, and Iran will no longer require benzene imports. The Bu Ali Sina Petrochemical Company (BSPC) attained its maximum output of 85,610 thousand tons of benzene in March, achieving 100% of its production capacity.


• January 2021 – Sinopec and Lyondell Basell finalized a joint venture in China to produce propylene oxide and styrene monomer. Both the companies signed an agreement to create a 50-50 joint venture to primarily cater to increasing demand for propylene oxide and styrene monomer in China's domestic market. The joint venture will use Lyondell Basell's advanced technology to build a new facility in Zhenhai, Ningbo, China, capable of producing 600 kilotons of styrene monomer per year.

REPORT COVERAGE

An Infographic Representation of Benzene Market

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The market research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, derivatives, and applications. In addition, the report offers insights into market trends and highlights vital industry developments. This report includes historical data & forecasts revenue growth at global, regional, and country levels, and analyzes the industry's latest market dynamics and opportunities. In addition to the factors mentioned above, the report encompasses various factors contributing to the market's growth in recent years.

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