Ethylene Oxide Market Overview
Ethylene Oxide Market size is estimated to reach US$1.2 billion by 2027, after growing at a CAGR of around 4.9% during the forecast period 2022 to 2027. Ethylene oxide (also known as oxirane) is an organic compound that appears as colorless and flammable gas with a faintly sweet odor. Due to its rich chemical properties and high reactive nature, ethylene oxide is used to make various chemical products such as detergents, thickeners, solvents, plastics and also various chemicals namely ethanolamines and ethylene glycol. The major use of ethylene oxide is in making ethylene glycol which is further processed to make chemical products such as glycol ethers, diethyl ether and polyester fibers. The major application of ethylene oxide is in sectors like the automotive, cleaning industry, textiles and medical sectors. Hence, factors like an increase in aircraft production, increase in consumption of detergents, increasing medical grade Polyetheretheketone (PEEK) Sterilization, growing construction activities and high productivity of the oil & gas sector are driving the growth of the ethylene oxide market size. However, the negative effects of ethylene oxide such as nausea, diarrhea, vomiting, breathlessness and eye and skin burn can limit its usage in certain sectors which can hamper the growth of the ethylene oxide industry. In 2020, due to the COVID-19 pandemic, end-users of ethylene oxide such as automotive and chemical saw a dip in their production level. Such a decrease in production reduced the usage of ethylene oxide in its end-use industries which negatively impacted the growth of the Ethylene Oxide industry.
The report: “Ethylene Oxide Market Report – Forecast (2022 – 2027)” by IndustryARC, covers an in-depth analysis of the following segments in the Ethylene Oxide industry.
By Function – Sterilizing Agent, Fumigating Agent and
By Application – Chemical Intermediates (Ethylene Glycol, Glycol Ethers, Ethanolamines, Ethoxylates, Acrylonitrile and more), Solvents, Thickeners, Adhesives, Detergents, Antifreeze, Pesticides, Pharmaceutical and Others.
By End-Use Industry – Automotive (Passenger Vehicles, Light Commercial Vehicles and Heavy Commercial Vehicles), Cleaning Industry (Household and Industrial), Aerospace (Commercial and Military), Building & Construction (Residential, Commercial, Industrial and Infrastructural) Oil & Gas Industry, Plastic, Textile, Medical, Agriculture, Chemicals, Personal Care and Others.
By Geography - North America (USA, Canada and Mexico), Europe (UK, Germany, France, Italy, Netherlands, Spain, Belgium and Rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Australia, New Zealand, Indonesia, Taiwan, Malaysia and Rest of APAC), South America (Brazil, Argentina, Colombia, Chile and Rest of South America) and Rest of the World (Middle East and Africa).
- Asia-Pacific dominates the Ethylene Oxide industry as major end-use industries for ethylene oxide such as automotive, construction, agriculture and chemicals are rapidly growing in economies like China and India on account of growing government initiatives to promote industrial development.
- The growing demand for commercial and passenger vehicles as well as an increase in usage of temperature efficient fluids for smooth functioning of vehicles will provide growth opportunities for the ethylene oxide market size as it is majorly used as antifreeze and brake fluids in cars.
- The high demand for convenient and easy-to-use detergent products contributed to the increase in usage of ethylene oxide-based derivatives in the manufacturing of detergents, resulting in positive market growth.
Figure: Asia-Pacific Ethylene Oxide Market Revenue, 2021-2027, (US$ Million)
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Ethylene Oxide Market Segment Analysis – By Application
Chemical intermediate held the largest portion of the Ethylene Oxide Market share in 2021 and is forecasted to grow at a CAGR of 5.4% during the forecast period 2022-2027. Ethylene Oxide as a chemical intermediate is used in the manufacturing of ethylene glycol, ethanolamines, glycol ethers and ethoxylates. These chemical compounds are further used in the making of other products such as ethylene glycol is used in making polyester fiber which forms automotive seat covers and raw material for clothing and apparel wear. According to the European Association of Automobile Manufacturers Association, in 2021, passenger car production in the US stood at 6.3 million units, showing a 3.1% increase in comparison with 2020. Further, according to National Investment Promotion and Facilitation Agency, till December 2021, FDI in India’s textile and apparel industry reached US$3.9 billion. The increase in passenger car production and FDI investment will create demand for polyester fibre in the automotive and textile sector resulting in more usage of ethylene glycol for producing such fiber. Rapid development in the automotive and textile sectors will have a positive impact on the demand for ethylene glycol, thereby contributing to the segment growth of ethylene oxide as a chemical intermediate.
Ethylene Oxide Market Segment Analysis –By End-Use Industry
The automotive sector held the largest portion of the Ethylene Oxide Market share in 2021 and is forecasted to grow at a CAGR of 6.2% during the forecast period 2022-2027. Ethylene Oxide as a chemical intermediate is majorly used to produce antifreeze liquid which is used to cool down engine temperature and as brake fluids, ethylene oxide is used in automotive brakes. Moreover, polyester fibres made from ethylene oxide ethylene glycol are used in automotive seat covers. Advantages provided by ethylene oxide such as the ability to withstand high temperatures will increase its usage in the automotive sector. According to the International Organization of Motor Vehicle Manufacturers, in 2021, global automotive production stood at 80.14 million units showing a 3% increase in comparison with the 2020 production level. Technological advancements coupled with the availability of good quality raw materials have increased the production level of automobiles. As a result, demand for ethylene oxide in the automotive sector is increasing significantly contributing to the segment’s growth in the forecast period.
Ethylene Oxide Market Segment Analysis – By Geography
Asia-Pacific held the largest portion of the Ethylene Oxide Market share in 2021 up to 41%. Major economies like China and India consist of major sectors like automotive, chemical and oil & gas sectors which are major users of ethylene oxide and its derivatives. Ethylene oxide is used as antifreeze for automotive engines and ethylene glycol derived from ethylene oxide is used to prevent hydrate formation in oil pipelines and to prevent them from corrosion. Government initiatives and growing investments to boost industrial developments have positively impacted the productivity level of these sectors. For instance, according to the International Organization of Motor Vehicle Manufacturers, in 2021, China’s automotive production stood at 26 million units showing a 3% increase, while India’s production stood at 4.4 million units showing a 30% increase. Such an increase in automotive production is increasing the usage of ethylene oxide in the Asia-Pacific region.
Ethylene Oxide market Drivers
Increase in Consumption of Detergents
Ethylene oxide is a versatile compound used in the making of chemicals such as ethanolamines and glycol ethers which form a major ingredient in making detergents. The COVID pandemic situation has raised the risk of infectious disease which has accelerated the demand for cleaning products such as detergents. For instance, according to first quarter reports of Henkel AG and Co. Kgaa, in Q1 of 2021, the laundry detergent sales of the company increased by 4.2%. Further, according to the quarterly reports of Proctor & Gamble, in Q4 2021, the dish detergents sale of the company increased by 2% in comparison with Q4 of 2020. An increase in the sale of detergents will increase the production level of such cleaning products and increase in demand for ethanolamines and glycol ethers. This will increase the usage of ethylene oxide in making such chemical compounds which will have a positive impact on the growth of the ethylene oxide industry.
Growing Building and Construction Activities
Ethanolamines derived from ethylene oxide are majorly used in the construction sector for producing cement grinding aids and performance enhancers which reduce the energy consumption during cement manufacturing. The government scheme to promote affordable housing coupled with a steady increase in annual investments in construction has increased the scale of construction activities. For instance, according to Germany’s Federal Statistical Office, in January 2022, the construction of 29,951 dwellings was permitted in Germany, showing an increase of 8.3% compared to 2021 same month. Further, according to the Australian Bureau of Statistics, in February 2022, the number of dwellings approved in Australia rose by 43.5%. The growing level of residential construction activities on account of the high demand for residential units will increase the demand for ethanolamines for cement production, resulting in more usage of ethylene oxide in making such chemical compounds. Hence, this will boost the growth of the ethylene oxide industry.
Ethylene Oxide Market Challenge
Negative Health Effects
Ethylene oxide is an alkaline agent and exposure to it can cause serious eye & skin burns, frostbite, breathing difficulty and bone cancer-like problems. Hence, due to its high applicability in many industries, the chances of getting exposed to such hazardous compounds are high. For instance, in the agriculture sector, as a pesticide it is used to control insects in grain bins, in the medical sector, it is used as a disinfectant for sterilizing surgical equipment and in the chemical sector, it is majorly used as an intermediate for chemical synthesis. Besides this, ethylene oxide is highly used in the automotive sector as antifreeze and brake fluid. The negative health effects of ethylene oxide can limit its usage in various end-use industries such as medical, agriculture, automotive and chemicals. This can have a negative impact on the growth of the ethylene oxide industry.
Ethylene Oxide Industry Outlook
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Ethylene Oxide Market. The top 10 companies in the Ethylene Oxide Market are:
- BASF SE
- Saudi Basic Industries Corporation
- Royal Dutch Shell Plc.
- DowDuPont Inc.
- India Glycols Limited
- Indorama Ventures Public Company Limited
- Huntsman International LLC
- Azko Nobel
- LOTTE Chemical Corporation
- In 2021, LOTTE Chemical Corporation invested US$211.4 million to expand its domestic production of ethylene oxide adduct which is an advanced material that is used in concrete.
- In 2021, India Glycols Limited and Clariant entered into a 51-49% joint venture called Clariant IGL Specialty Chemicals Private Limited which will result in the production of renewable ethylene oxide.
- In 2019, BASF SE in line with its customer-focused corporate strategy invested US$560 million to expand the production capacity of ethylene oxide and its derivatives at its Verbund site in Antwerp, Belgium.
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