Naphtha Market Revenue to Cross USD 407.8 billion, Globally, by 2033

Introduction

The global Naphtha Market is poised for steady growth, with its size projected to increase from USD 283.6 billion in 2023 to approximately USD 407.8 billion by 2033, reflecting a compound annual growth rate (CAGR) of 3.7% during the forecast period.

Naphtha, a crucial raw material in petrochemical production and gasoline blending, is witnessing rising demand due to its extensive use in the manufacturing of plastics, chemicals, and fuel. The growth is primarily driven by the expanding petrochemical industry, particularly in Asia-Pacific, where countries like China and India are leading the demand for naphtha as they continue to industrialize rapidly.

However, the market faces challenges, including volatility in crude oil prices, which directly impact naphtha production costs. Additionally, environmental regulations targeting emissions and the push toward cleaner energy sources pose potential constraints on market growth. Despite these challenges, recent developments such as advancements in refining technologies and the increasing integration of bio-naphtha, a more sustainable alternative, are expected to provide new growth avenues for the industry.

The ongoing shift towards lighter feedstocks in the petrochemical industry and the rising demand for ethylene production are also contributing to the market’s expansion. Companies are increasingly investing in modernizing refineries to enhance naphtha production efficiency and reduce environmental impact.

LG Chem, a leading chemical company, has been actively expanding its naphtha cracking operations to meet the growing demand for petrochemical products. The company recently announced an investment of over USD 2 billion to enhance its naphtha cracking center in South Korea, aiming to increase its production capacity for ethylene and propylene, key raw materials for plastics and chemicals.

China Petrochemical Corporation (Sinopec), one of the largest state-owned enterprises in China, has been focusing on increasing its naphtha production to support the country’s rapidly growing petrochemical sector. In 2023, Sinopec completed the acquisition of several smaller refineries to boost its naphtha output, ensuring a steady supply for its downstream operations.

Chevron, a major global energy company, has been diversifying its portfolio by investing in more sustainable naphtha production methods. The company recently launched a new bio-naphtha project in collaboration with Neste, a leading producer of renewable diesel and sustainable aviation fuel.

Mangalore Refinery and Petrochemicals Limited (MRPL), an Indian state-owned company, has been expanding its refining capacity to meet the increasing domestic demand for naphtha. In 2023, MRPL secured funding of USD 500 million to upgrade its existing refinery infrastructure, enabling it to produce higher-quality naphtha with lower sulfur content.

Key Takeaways

The global naphtha market is on track to reach around USD 407.8 billion by 2033, growing from USD 283.6 billion in 2023 at a steady rate of 3.7% annually. This growth is mainly due to the rising demand for fuel used in transportation across the world.
Naphtha is crucial as a chemical feedstock, making up 63.8% of the total volume in 2023. It’s heavily used in steam cracking to produce propylene, ethylene, and gasoline, which are essential for making plastics and synthetic rubber.
The petrochemical industry was the largest user of naphtha, holding a 51.6% market share in 2023. Naphtha is vital in producing key chemicals like ethylene and propylene, which are used in industries such as packaging, construction, and automotive.
The Asia Pacific region leads the naphtha market, accounting for over 58.4% of the total volume in 2023. This dominance is due to a growing population, increased use of electrical and transport equipment, and rising demand for plastics in the construction and automotive sectors.

Statistics

According to the commodity market analysis system of SunSirs, the average price of hydrogenated naphtha in the domestic market in 2023 was 6,841.50 RMB/ton at the beginning of the year and 7,746.50 RMB/ton at the end of the year, with an annual increase of 13.23%.
The highest point of the year occurred on March 13th at 8,389.00 RMB/ton, and the lowest point of the year occurred on January 1st at 6,841.50 RMB/ton, with a maximum amplitude of 22.62%.
The market for hydrogenated naphtha has seen more ups and downs, with 8 months of upward movement and 4 months of downward movement. The highest increase was in January, up 15.02%, and the highest decrease was in March, down 7.31%.
The highest point of the year occurred on March 13th at 8,241.50 RMB/ton, and the lowest point of the year occurred on January 1st at 6,814.00 RMB/ton, with a maximum amplitude of 20.95%.
The import amount was 54,319 million RMB, a year-on-year increase of 29.5%.
Looking at Vortexa data for world oil product exports shows that the share of naphtha is very stable over time at around 9.5%. Dirty products are steadily declining from close to 17% mid 2020 to 13.7%.
The Naphtha price in the United States decreased during April 2019 to 499 USD per metric ton, which represents a decline of 7% compared to the previous month’s value. On a year-over-year basis, Naphtha prices in the United States decreased by 7%.
Brazil, the average price of Naphtha amounted to 528 USD per metric ton in April 2019, from 600 USD per metric ton one year earlier. On a month-over-month basis, the Naphtha price in Brazil is 0.8% higher than the price one month before.
Naphtha prices in Canada increased modestly during April 2019, reaching 495 USD per metric ton, which means a rise of 4% from the previous month’s price and a decline of 9% from the previous year’s price.
Such price movement in Chile meant a rise of 8% every month and a rise of 49% every year. On the other hand, in April 2019, the Naphtha price in Mexico witnessed a decline of 63 USD per metric ton when compared against the previous month’s price, to 464 USD per metric ton. The April 2019 price in Mexico is 18% lower than the price one year before.
The company, which owns a naphtha cracker producing 700,000 metric tons per year in the eastern state of West Bengal, sources 50% of its feedstock from the Middle East and relies on local refiners like Indian Oil, HPCL and BPCL for the rest of its feedstock needs.
China block copolymer and raffia-grade price spreads between 2022 and 26 January this year were 144% lower than their long-term average with injection grade spreads 145% lower.
Growth in global PP capacity between 2024 and 2030 would have to be 45% lower than the ICIS base case for global operating rates to hit their long-term healthy average of 87%.
Based on what we see as a further surge in capacity in a weak global growth environment, we are forecasting global PP operating rates of just 76% in 2024-2030.
Global naphtha exports are remaining strong, having even surpassed pre-pandemic levels. August overall exports are currently at 3.35 mn b/d, up by 7% from July levels.
Europe’s tight naphtha supply for the July loading program has curbed outflows into Asia as volumes drop 12.21% month on month to 1.51 million mt, fueling substantially bullish sentiment in the naphtha markets.
An estimated 160,000 mt of naphtha from Mediterranean and Black Sea ports are destined for NWE to date in July, higher by 58,000 mt than in June, statistics from data intelligence firm Kpler showed.
Meanwhile, chartering activity for the August-loading program has started, with four product tankers booked to load around 300,000 mt of naphtha loading in the first decade of August with voyage options to Japan, sources said.
Russia is set to export 509,000 mt of naphtha to Europe so far in July, less than pre-pandemic exports of 640,000 mt in July 2019. Also, European refinery runs have not returned to pre-pandemic levels.
Singapore-based trading arm HPL Global Pte Ltd., with up to 2 million tonnes of naphtha to be delivered over 10 years beginning in this year’s second quarter.
Spot naphtha prices in Europe and Asia have increased by about 20% since the start of this year, recovering from a period of turbulence that saw prices hit multi-month lows.
Naphtha prices in Asia have increased by $85/ton from late December 2018, when prices hit a 17-month low, and it is currently reported at around $540/ton CFR Japan.
Naphtha still is a very important feedstock and almost 40% of the total world’s ethylene production is based on naphtha. But if you just look back the start of this decade, that number was more than 50%.
Asia’s 2017 monthly net supply deficit is expected to rise to 4.2 million tonnes versus 4 million tonnes last year.
Boston-based consultant ESAI said that a 50% increase in gas production in India has boosted the country’s gas consumption. While there are impediments to supply growth, over the next 5 years increased access to gas will allow consumption to rise to a projected 85 billion cu m/year by 2015.
ESAI estimates that 15% of India’s nitrogenous fertilizer production is from naphtha.
In FY 23, the total domestic production of Naphtha amounted to 13.8 million tons.
India exported 4.4 million of Naphtha worldwide. During the same period, the South Asian economy imported 1.3 million tons of Naphtha.
The import duty on Naphtha has been increased to 2.5% from 1% to discourage import and bolster indigenous production.
Indian petroleum consumption reached 222.3 million tons, jumping by 10.2% from the previous fiscal.
Global HVO capacity will be a little over 17 million tons by the end of 2022 and is set to rise to close to 34 million tons by 2027, according to data compiled by Argus.
Global SAF output is set to grow at the same time from around 1 million tons in 2022 to over 17.5 million tons by 2028, with the UAE accounting for about 400,000 ton of capacity and 300,000 ton in Turkey.
Nestle is the only active bio naphtha producer in the Asia-Pacific region: it makes 1.3 million tons/year of HVO in Singapore and aims to double output in the first quarter of next year.

Discover market potential and regional growth opportunities. Download PDF Sample Report @ https://market.us/report/naphtha-market/#requestSample

Emerging Trends

Shift Towards Bio-Naphtha: A significant trend in the naphtha market is the growing shift towards bio-naphtha, a renewable alternative derived from biomass. As environmental concerns and sustainability become more prominent, companies are increasingly exploring bio-naphtha to reduce their carbon footprint. This trend is particularly strong in Europe, where regulations are pushing for greener alternatives in petrochemical feedstocks.
Increased Integration of Advanced Refining Technologies: Refineries are increasingly adopting advanced technologies to improve the efficiency of naphtha production. Technologies such as hydrocracking and catalytic reforming are being optimized to enhance yield and reduce production costs. These advancements are helping refineries meet the rising demand for high-quality naphtha, especially in regions like Asia-Pacific where industrialization is accelerating.
Growing Demand in Petrochemical Industries: The demand for naphtha is closely tied to the growth of the petrochemical industry, particularly for the production of ethylene and propylene, which are key building blocks for plastics and synthetic rubbers. As the global demand for plastics continues to rise, driven by industries such as packaging, automotive, and electronics, the naphtha market is expected to see steady growth.
Impact of Fluctuating Crude Oil Prices: The naphtha market is highly sensitive to fluctuations in crude oil prices, which directly affect production costs. Recent volatility in the oil market has led to uncertainty in naphtha pricing, pushing companies to explore cost-effective and alternative feedstocks. This volatility is also driving interest in natural gas liquids (NGLs) and liquefied petroleum gas (LPG) as substitutes for naphtha in certain applications.
Regional Shifts in Production and Consumption: The Asia-Pacific region continues to dominate the naphtha market, driven by its large population, rapid industrialization, and growing petrochemical industry. However, there is an emerging shift in production towards the Middle East, where abundant oil reserves and new refining capacities are positioning the region as a major exporter of naphtha. This shift is influencing global trade dynamics and could lead to changes in market strategies.
Focus on Sustainability and Environmental Regulations: With increasing regulatory pressures to reduce carbon emissions, there is a growing focus on sustainable naphtha production practices. Companies are investing in cleaner technologies and exploring the use of renewable feedstocks to produce naphtha. This trend is expected to shape the future of the naphtha market, particularly in regions with stringent environmental laws.

Use Cases

Petrochemical Feedstock: Naphtha is a critical feedstock in the petrochemical industry, primarily used for producing ethylene and propylene through steam cracking processes. Ethylene and propylene are essential building blocks for a wide range of products, including plastics, synthetic rubber, and chemicals. In 2023, naphtha accounted for over 63.8% of the total volume share in this application, highlighting its importance in the global petrochemical supply chain.
Gasoline Blending: Another major use case for naphtha is in gasoline blending. Naphtha is blended with other hydrocarbons to produce high-octane gasoline, which is essential for modern internal combustion engines. As the global demand for transportation fuel continues to rise, particularly in developing regions, the use of naphtha in gasoline production is expanding. In 2023, this application was a key driver for the naphtha market, particularly in regions like North America and Europe, where there is a strong focus on producing cleaner-burning fuels.
Production of High-Octane Fuels: Naphtha is increasingly used in the production of high-octane fuels, especially in countries looking to reduce emissions and improve fuel efficiency. High-octane fuels are necessary for newer, more efficient engines that are designed to meet stringent environmental regulations. This use case is particularly relevant in markets like the United States and Europe, where regulations are driving the demand for higher-quality fuels.
Solvent Applications: Naphtha is also widely used as a solvent in various industrial applications, including the manufacturing of paints, adhesives, and cleaning agents. Its ability to dissolve a wide range of substances makes it a versatile component in these industries. The global market for solvents continues to grow, supporting the demand for naphtha in these applications. For instance, the use of naphtha in the production of industrial solvents is expected to see steady growth, particularly in regions with robust manufacturing sectors like Asia-Pacific.
Hydrogen Production: Naphtha is used as a feedstock in hydrogen production, which is crucial for refining processes and the production of ammonia for fertilizers. As the demand for clean hydrogen grows, driven by the global push for decarbonization, the role of naphtha in hydrogen production is becoming increasingly important. This use case is particularly relevant in the context of green hydrogen initiatives, where naphtha could play a role in transitional technologies.

Key Players Analysis

LG Chem is a major player in the naphtha sector, particularly known for its large-scale naphtha cracking operations in South Korea. The company has been focusing on enhancing its production capacity to meet the growing demand for petrochemical products like ethylene and propylene.

China Petrochemical Corporation (Sinopec), one of the world’s largest integrated energy and chemical companies, plays a crucial role in the naphtha market. Sinopec is heavily involved in naphtha production, which it uses as a feedstock for its extensive petrochemical operations. The company has been expanding its production capacity to support China’s rapidly growing petrochemical industry.

Chevron plays a significant role in the naphtha market by producing and supplying naphtha as a key feedstock for petrochemical industries. The company has been actively involved in refining and marketing naphtha, particularly focusing on integrating sustainable practices into its operations.

Mangalore Refinery and Petrochemicals Limited (MRPL) is a leading player in India’s naphtha market, contributing significantly to the production and export of high-quality naphtha. MRPL operates a large-scale refinery that produces naphtha used in both domestic and international markets, particularly in Southeast Asia.

Exxon Mobil Corporation is a leading player in the global naphtha market, known for its extensive production and distribution of naphtha as part of its broader oil and gas operations. Headquartered in Texas, USA, and founded in 1866, ExxonMobil is one of the largest producers of naphtha worldwide.

Reliance Industries Limited, based in India, is another major player in the naphtha market, particularly known for its significant role in the petrochemical sector. The company operates the world’s largest refining complex in Jamnagar, Gujarat, where it produces a substantial volume of naphtha used for various petrochemical processes.

BP is a major player in the naphtha sector, focusing on the production and supply of high-quality naphtha for use in petrochemical processes, particularly in steam cracking to produce ethylene and propylene. BP leverages its extensive refining operations globally, with significant production capabilities in Europe and Asia.

Shell is deeply involved in the naphtha market, supplying a substantial volume of naphtha to the global petrochemical industry. The company utilizes its vast network of refineries, particularly in Europe and Asia, to produce and distribute naphtha for use in steam cracking and gasoline blending.

SABIC is a major player in the naphtha market, leveraging its position as one of the world’s largest petrochemical manufacturers. The company utilizes naphtha primarily as a feedstock in its extensive network of petrochemical plants, particularly in the production of ethylene, propylene, and other key chemicals used in plastics and synthetic materials.

British Petroleum (BP), a global energy giant, is deeply involved in the naphtha sector as part of its broader petrochemical operations. BP uses naphtha as a critical feedstock in its production of ethylene and propylene, which are essential for manufacturing various plastics and chemicals. The company’s focus on optimizing its supply chain and refining processes has helped it maintain a strong position in the naphtha market.

CNPC (China National Petroleum Corporation) is a major player in the naphtha sector, leveraging its extensive refining capabilities to produce and supply naphtha for both domestic and international markets. As one of the largest integrated energy companies in the world, CNPC utilizes naphtha primarily as a feedstock in its petrochemical operations to produce essential chemicals like ethylene and propylene.

China Petroleum & Chemical Corporation (Sinopec) is a key player in the global naphtha market, known for its extensive refining and petrochemical operations. The company’s focus on integrating upstream and downstream operations ensures a steady supply of naphtha for producing essential chemicals like ethylene and propylene, which are vital for the plastics and synthetic materials industries.

Formosa Petrochemical Corporation is a major player in the naphtha market, primarily focusing on refining and petrochemical production. The company operates one of the largest naphtha cracking centers in Taiwan, which processes naphtha into ethylene, propylene, and other essential petrochemicals used in the production of plastics and synthetic materials.

Saudi Aramco is one of the largest producers of naphtha globally, leveraging its vast crude oil reserves and refining capacities. The company supplies naphtha as a critical feedstock to petrochemical plants worldwide, particularly in Asia, where it is used for producing ethylene, propylene, and other key chemicals.

Lotte Chemical Corporation is a major player in the naphtha sector, actively involved in both production and downstream applications. The company has recently made significant strides by investing in advanced naphtha cracking facilities, particularly in South Korea and Indonesia. One notable development is the construction of a $2.4 billion naphtha cracker in Indonesia, which aims to enhance Lotte’s position in the global ethylene market.

Conclusion

Naphtha Market is poised for steady growth, driven by its critical role in various industries, including petrochemicals, gasoline blending, and solvents. With the market projected to reach approximately USD 407.8 billion by 2033, up from USD 283.6 billion in 2023, the demand for naphtha is expected to remain strong, particularly in Asia-Pacific, where industrialization and manufacturing continue to expand. Despite these challenges, advancements in refining technologies and the growing interest in bio-naphtha and sustainable practices present new opportunities for market players.

Sources :

https://procurementtactics.com/naphtha-prices/#:~:text=Overall%2C%20the%20Global%20Naphtha%20Market,%243949%20market%20value%20by%202030.
https://www.sunsirs.com/m/page/commodity-news-detail/commodity-news-detail-16958.html
https://www.vortexa.com/insights/products/exploring-the-forces-behind-the-weakness-of-naphtha-prices/
https://www.intratec.us/products/energy-price-references/commodity/naphtha-price
https://economictimes.indiatimes.com/industry/indl-goods/svs/petrochem/haldia-petrochemicals-seeks-local-indian-naphtha-supplies-amid-red-sea-disruption-ceo/articleshow/108826904.cms?from=mdr
https://www.icis.com/explore/resources/news/2024/01/31/10967125/blog-china-pp-naphtha-spreads-hit-new-low-as-long-term-markets-shift-continues/
https://www.vortexa.com/insights/products/naphtha-persistence-lifts-lr1-tanker-rates-in-the-middle-east/
https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/shipping/072321-july-loading-europe-to-asia-naphtha-arbitrage-falls-to-151-mil-mt-boosts-market-strength
https://www.ogj.com/general-interest/article/55088704/qatarenergy-signs-10-year-naphtha-supply-agreement-with-haldia-petrochemicals
https://www.chemorbis.com/en/plastics-news/Spot-naphtha-prices-rise-to-3-month-high-in-Asia-Europe/2019/02/26/752200&isflashhaber=true#reportH
https://www.spglobal.com/commodityinsights/en/ci/research-analysis/video-naphtha-reemerging-role-as-an-essential-product-and-fee.html
https://www.financialexpress.com/business/industry-indias-naphtha-exports-to-decline-on-rising-local-demand-555157/
https://www.ogj.com/pipelines-transportation/lng/article/17264699/indias-gas-use-could-displace-100000-b-d-of-naphtha
https://theindiawatch.com/manufacturing-and-b2b/as-naphtha-becomes-a-mainstream-chemical-the-market-grows-steadily
https://www.gpca.org.ae/2022/08/29/road-to-decarbonization-unlocking-the-role-of-bionaphtha/