Global Naphtha Market Growth Analysis - Market Size, Share, Forecast Trends and Outlook Report (2024-2032)

Global Naphtha Market Size

The global naphtha market size was valued at USD 168.18 billion in 2023. The market is further projected to grow at a CAGR of 4.2% between 2024 and 2032, reaching a value of USD 242.73 billion by 2032.

Key Takeaways

• In 2023, the consumption volume of naphtha reached 1.2 million metric tons.

• The global price of naphtha was approximately USD 789 per metric ton in 2022 and USD 648 per metric ton in 2021.

• The production capacity of petrochemicals was 2.4 billion metric tons in 2022.

Naphtha is a light hydrocarbon mixture derived from crude oil or natural gas condensates. It is mainly used as a feedstock for petrochemicals, such as ethylene and propylene, or as a blending component for gasoline. Naphtha is also used as a solvent, a fuel, and a raw material for explosives and synthetic fibers. Naphtha is a key component in energy, automotive, plastic, and chemical industries, as it is the main source of aromatics, olefins, and gasoline blending components.

The global naphtha market is driven by increasing demand for petrochemicals in Asia Pacific, rising demand for fertilisers in India, and the use of naphtha as a significant feedstock component, particularly in the petrochemicals industry. The naphtha market expansion can also be attributed to the increasing product consumption in several industries including construction, transportation, and plastic. In addition, the increasing demand for petrochemicals, like propylene and ethylene to produce plastics is increasing the naphtha market value. Further, the advent of alternative technologies like hydro-pyrolysis for breaking down naphtha saves energy and helps in reducing the production cost. This, coupled with the development of advanced furnace materials and distillation columns, is creating a positive naphtha market outlook.

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Key Trends and Developments

Expansion of petrochemical sectors, increasing prices of naphtha, and strong naphtha trade flows are boosting the market growth

Naphtha Market Trends

The petrochemical sector is the largest consumer of naphtha, accounting for the majority of the total demand. The demand for petrochemical products such as plastics, synthetic fibres, and solvents is expected to grow in the coming years, driven by the increasing population, urbanisation, and industrialisation. To meet this demand, several new petrochemical plants and crackers are being built or planned in regions such as Asia, Middle East, and North America. This may increase the demand for naphtha as a feedstock and support the naphtha market growth.

Moreover, the introduction of new and advanced products, such as low-carbon hydrogen is leading to naphtha market development. This development aligns with the growing global focus on sustainability and the transition to low-carbon energy sources. The integration of low-carbon hydrogen in naphtha production processes can contribute to mitigating the environmental impact associated with traditional naphtha production.

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Naphtha Industry Segmentation

Global Naphtha Market Report and Forecast 2024-2032 offers a detailed analysis of the market based on the following segments:

Petrochemicals sector is expected to hold significant market share because it uses naphtha as a primary feedstock to produce petrochemicals

According to the naphtha market report, the petrochemical segment accounted for the largest share as it is a primary feedstock to produce various petrochemicals, such as ethylene, propylene, benzene, toluene, and xylene. These petrochemicals are used to manufacture plastics, synthetic fibres, rubber, solvents, and other chemicals. The demand for naphtha from the petrochemical industry is driven by the growing consumption of these products in various sectors, such as packaging, automotive, construction, and electronics.

Furthermore, the report estimates that the agriculture segment held the second-largest share of the global naphtha market. Naphtha is also used as a raw material for the synthesis of ammonia, which is further converted into urea, ammonium nitrate, and other nitrogenous fertilisers used in agriculture. Naphtha-based ammonia is preferred over natural gas-based ammonia due to its lower cost and higher purity. The demand for naphtha from the agriculture sector is influenced by the rising population, food security, and need for better crop yield.

According to the naphtha market overview, the paints and coatings segment is also witnessing steady growth rate since the historical period. Naphtha helps to reduce the viscosity and improve the flow of paints and coatings, as well as to enhance their drying and curing properties. Naphtha-based paints and coatings are widely used in various industries, such as automotive, construction, marine, and aerospace in the form of solvent and diluent. The demand for naphtha from the paints and coatings sector is dependent on the growth of these end-use industries and the increasing demand for high-performance and eco-friendly products, such as low-carbon hydrogen naphtha.

Light naphtha contributes to market growth as it is a heavily traded commodity for making petrochemical steam crackers

Light naphtha is a liquid hydrocarbon mixture obtained from natural gas condensates, petroleum distillates, and the catalytic cracking of heavy oil fractions. It consists mainly of pentane and hexane and is used as a feedstock for gasoline production, petrochemicals, and solvents.

The light segment is expected to lead the naphtha market share as it is a heavily traded commodity, with its production widely spread across North America, Northeast Asia, and the Middle East, accounting for nearly 60% of the total global production. The production of light naphtha is increasing globally and is anticipated to create a surplus in stock in the coming years, exceeding market demand. The fast-expanding tight oil and shale gas output in North America, particularly the US, will contribute to the projected surplus supply and capacity expansions. The demand for light naphtha is further influenced by the growth of the petrochemical industry, especially in Asia Pacific.

Meanwhile, as per naphtha market analysis, heavy naphtha is a heavier fraction of crude oil that boils between 150°C and 270°C. It contains more aromatics and naphthene than light naphtha and is used as a feedstock for reforming, hydrotreating, and aromatics extraction. It is also used as a blending component for gasoline and jet fuel. The demand for heavy naphtha is influenced by several factors, including its refining capacity and efficiency, the quality and price of crude oil, and environmental regulations on fuel specifications. Heavy naphtha is used as a feedstock for manufacturing high-octane gasoline components through catalytic reforming. It is also utilised in the petrochemical industry for producing solvents and olefins.

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Competitive Landscape

The naphtha market is witnessing increased consolidation and collaboration among market players to enhance their competitiveness, market access, and portfolio diversification.

Other key players in the global naphtha market include LG Chem, Reliance Industries Ltd., Saudi Basic Industries Corporation, Formosa Petrochemical Corporation, Petróleos Mexicanos, Sasol Limited, BP PLC, China National Petroleum Corporation (CNPC), and Vitol Group, among others.

Global Naphtha Market Analysis by Region

Asia Pacific dominates the market due to high production of naphtha in the region

The Asia Pacific region has the largest and fastest-growing naphtha market in the world because it is the largest producer of petrochemicals, especially ethylene and propylene, which contributes to more than half of the naphtha demand in the region. Naphtha consumption in the region is mainly driven by the demand for ethylene and propylene, which are the building blocks for various products, such as plastics, synthetic fibres, detergents, and solvents. The region is expected to maintain its dominant position in the naphtha market, as petrochemical demand continues to grow in China, India, Japan, and South Korea, driven by the increasing population and rapid industrialisation.

The naphtha industry in the European region is expected to witness moderate growth. The naphtha production in the Europe region is mainly concentrated in Russia, Germany, the UK, and France due to the increasing demand from the end-use industries, such as construction, packaging, consumer goods, and automotive, in the emerging markets of Eastern Europe and Turkey. The naphtha consumption in the region is also supported by the gasoline demand, as naphtha is used as a blending component to meet the gasoline specifications in some countries, such as Germany, France, and Italy.

The Middle East and Africa naphtha market size is estimated to grow at a promising CAGR as it exports the product on a large level, leading to an increase in market revenue. The region has an abundance of crude oil, which is needed in distillation, a key process for naphtha production. Moreover, the Middle East and African region has a moderately growing chemical industry, which is expected to contribute to healthy naphtha market growth in the future.

Key Highlights of the Report