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The propylene oxide market size is estimated to grow by USD 6.24 billion at a CAGR of 4.72% between 2023 and 2028. The primary market driver is the growing demand for polyurethane additives, which is used in industries such as construction, automotive, and furniture. Propylene oxide is also used in producing lightweight materials essential for fuel efficiency and environmental sustainability in automotive, aerospace, and construction sectors.
The market share growth by the polyether polyols segment will be significant during the forecast period. The polyether polyol manufacturing process involves the reaction of propylene oxide with a polyfunctional alcohol, resulting in the formation of polyether polyols. Polyurethane foams made from polyether polyols are widely used in the construction industry for insulation purposes.
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The polyether polyols was the largest segment and was valued at USD 12.60 billion in 2018. With the global focus on energy efficiency and sustainability, there is an increasing demand for insulation materials, contributing to the growth of the polyether polyols segment. Polyurethane materials derived from polyether polyols are used in automotive interiors, seating, and various other components due to their lightweight and durable properties. As the automotive industry continues to grow and seek lighter materials to enhance fuel efficiency and achieve sustainability, the demand for polyether polyols will increase. Overall economic growth, especially in regions with rapidly growing industrial sectors, can lead to increased demand for polyurethane products and, consequently, polyether polyols and propylene oxide, thereby boosting the growth of the market during the forecast period.
Based on the end-user, the market has been segmented into automotive, building and construction, textile and furnishing, and others. The automotive segment will account for the largest share of this segment.? The demand in the automotive sector is influenced by several factors, including the overall growth of the global automotive industry, trends in vehicle design and manufacturing, and regulatory requirements. As the automotive industry evolves, with a focus on incorporating lightweight materials and enhancing comfort and safety features, the demand for propylene oxide and its derivatives may experience corresponding changes, thus leading to the growth of the propylene oxide market during the forecast period.
APAC is estimated to contribute 49% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The APAC region, particularly countries such as China and India, has experienced rapid industrialization and urbanization. This growth has led to an increased demand for a variety of chemical products, including propylene oxide, which is a key intermediate in the production of polyurethanes and other chemicals. The robust construction industry and infrastructure development in many countries across APAC have driven the demand for polyurethane foams and other materials. These materials are commonly used in insulation, coatings, adhesives, and sealants in the construction sector. The expanding automotive industry in APAC, which is driven by both domestic sales and exports of automobiles, has contributed to the demand for propylene oxide.
In addition, polyurethane materials derived from propylene oxide are used in various automotive components, including seat cushions, interior trims, and insulation. In addition, the overall growth of the chemical industry in APAC, driven by demand from various end-user industries, has positively impacted the demand for propylene oxide, which, in turn, will boost the growth of the market in APAC during the forecast period.
The market is driven by its use in the production of polyurethane foam products, particularly in the automotive industry. Manufacturing facilities rely on propylene, a key component derived from refineries and petrochemical products, for the synthesis of propylene oxide (PO). This compound is essential for the production of various materials, including flexible foams and rigid foams, used in automotive cushioning, bedding, and furniture. The market's growth is supported by the increasing demand for polyurethane materials, with propylene oxide playing a crucial role in their production process. Polyurethanes rigid foam, characterized by its molecular formula and synthesized using polyethers, undergoes rigorous assessment through both qualitative and quantitative methods, contributing to a robust understanding within the competitive structure of the materials industry.
Growing demand for polyurethane is notably driving the market growth. The primary driver of demand is the polyurethane industry, where polyurethane foams are utilized in various sectors including construction, automotive, furniture, and bedding. The expanding global healthcare sector and ongoing advancements in medical technology also fuel the need for polyurethane in this field. Additionally, the focus on energy efficiency and sustainability across industries has led to a rise in the adoption of polyurethane materials, particularly in insulation applications, where they help reduce energy consumption. This trend is seen in various sectors, including the automotive industry and manufacturing facilities. Polyurethane is derived from propylene, a product of refineries and a key component in petrochemical products. The demand for propylene is also influenced by its use in the production of gasoline, diesel, and jet fuel through steam crackers.
Furthermore, polyurethane is employed in the electronics industry for potting and encapsulating electronic components, as well as in packaging materials. The increasing prevalence of electronic devices worldwide and the demand for protective packaging are driving the greater use of polyurethane in these areas. Therefore, the rising utilization of polyurethane is expected to positively impact market growth in the coming years.
Growth in the global automotive industry is an emerging trend shaping the market. The growth of the global automotive industry significantly impacts the demand due to its essential role in producing various materials used in automotive manufacturing. This is a key raw material used in the production of polyurethane, which finds extensive use in automotive applications. Polyurethane foams, derived from propylene oxide, are used in seat cushions, headrests, armrests, interior trims, and insulation components within vehicles. Automakers are aiming to reduce the weight of automobiles for improved fuel efficiency and performance.
However, the expansion and evolution of the global automotive industry influence the demand due to their versatility, performance, and suitability for various automotive applications. As automakers continue to innovate, prioritize sustainability, and meet evolving consumer demands, the demand for propylene oxide is likely is surge, which will have a positive impact on the market during the forecast period.
Environmental and regulatory concerns are significant challenges hindering market growth. The production involves processes that may lead to the release of pollutants or hazardous by-products. The need for compliance with stringent environmental standards and safety regulations adds to the complexity and cost of propylene oxide production, thereby negatively impacting the overall competitiveness in the market. Propylene oxide is classified as a hazardous substance; the handling, storage, and transportation of propylene oxide requires adherence to stringent safety protocols to mitigate risks to workers and the environment. These concerns can impact propylene oxide production practices and costs.
Additionally, compliance with evolving regulations regarding emissions, waste disposal, and workplace safety can require significant investments in technology upgrades, process modifications, and employee training, thereby impacting the overall cost of propylene oxide production, which may negatively impact the growth of the market during the forecast period.
Companies are implementing various strategies by analyzing factors such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product or service launches, to enhance their presence in the market.
Befar Group Co. Ltd. - The company offers propylene oxide, mainly used in polyether polyols, propylene glycol, various non-ionic surfactants, and many more.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including Archer Daniels Midland Co., BASF SE, Befar Group Co. Ltd., Dow Chemical Co., Evonik Industries AG, Indorama Ventures Public Co. Ltd., INEOS Group Holdings SA, LyondellBasell Industries N.V., Manali Petrochemicals Ltd., Merck and Co. Inc., Repsol SA, Sadara Chemical Co., Shell plc, SK Chemicals Co. Ltd., Sumitomo Chemical Co. Ltd., Tokuyama Corp., Wanhua Chemical Group Co. Ltd., Balchem Inc., and ThyssenKrupp AG
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
The market is driven by its versatile applications in industries such as automobile cushioning, construction materials, and medical garments. Derived from petroleum or bio-based feedstock like canola oil and soybean oil, it offers bonding properties and thermal insulation. Despite concerns over its toxic nature, advancements in greener processes aim to reduce environmental impact and lower greenhouse gas emissions. The market sees growth in energy-efficient materials for lightweight vehicles and reduced energy consumption in the refrigeration sector. Regulatory compliance and safety standards drive the shift towards sustainable products with minimized carbon footprint.
Moreover, the global propylene oxide market is pivotal in supplying raw materials for various applications such as automotive seating, battery encapsulation, and adhesives and coatings. Advanced polymers like unsaturated polyester resins (UPR) are crucial in enhancing products' thermal insulation properties and strength-to-weight ratio, supporting innovations in weight reduction applications across the transportation sector. Concerns over environmental impact and emissions reduction drive the industry to explore alternatives such as vegetable oils and bio-based materials like castor oil and rapeseed oil. These materials offer protective properties and are integral in producing wound dressings, hospital bedding, and protective gloves with enhanced cushioning properties and skin irritation resistance.
Furthermore, innovations in chemical intermediates and specialty surfactants contribute to advancements in thermal management and noise reduction technologies, addressing both environmental concerns and human life expectancy by improving product safety and durability in critical applications such as pacemakers and hip replacements.
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Market Scope |
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Report Coverage |
Details |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 4.72% |
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Market Growth 2024-2028 |
USD 6.24 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
4.52 |
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Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
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Performing market contribution |
APAC at 49% |
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Key countries |
US, China, Japan, India, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Archer Daniels Midland Co., BASF SE, Befar Group Co. Ltd., Dow Chemical Co., Evonik Industries AG, Indorama Ventures Public Co. Ltd., INEOS Group Holdings SA, LyondellBasell Industries N.V., Manali Petrochemicals Ltd., Merck and Co. Inc., Repsol SA, Sadara Chemical Co., Shell plc, SK Chemicals Co. Ltd., Sumitomo Chemical Co. Ltd., Tokuyama Corp., Wanhua Chemical Group Co. Ltd., Balchem Inc., and thyssenkrupp AG |
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Market dynamics |
Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our market research report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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