Global Naphtha market led by demand from Asia Pacific

The global naphtha market is mainly driven by the market for chemicals which includes petrochemicals, toluene, xylenes, and benzene as per Transparency Market Research. Naphtha which is a very versatile commodity is mostly found in coal tar, refined petroleum, and shale oil. Distillation of coal tar produces coal tar naphtha which is an extensively used commercial product. Furthermore, the destructive distillation of bituminous shale oil produces shale naphtha. Various industries make use of naphtha for the purpose of gasoline blending. Paraffinic naphtha, and heavy naphtha are the two main classes of naphtha in the global naphtha market. High content of olefins in paraffinic naphtha make it suitable for the production of olefin and polyolefin. The manufacturing of aromatics mainly makes use of heavy naphtha. The growth of the global naphtha market can be attributed to the rising naphtha demand from end-user industries like transportation, plastic, and construction. The global naphtha market is segmented on the basis of application and geography. Based on application, the global naphtha market can be classified into fuel/energy, chemicals, and others. Fuel/energy segment includes steel plants, power plants, and fertilizer units. The segment for chemicals includes petrochemicals, benzene, xylene, and toluene. The global naphtha market is essentially dominated by the chemicals segment. It is also expected that in the forthcoming five to six years, the dominance of the chemicals segment will only increase. The process of steam, cracking makes use of naphtha in order to produce olefins. Also, naphtha is used as the main feedstock in high-octane gasoline, and in reforming for making aromatics. Naphtha is also used as a solvent in many industries. The second largest share in the global naphtha market is held by the energy and fuel applications segment. However, the share of this segment is expected to decline by the year 2019. The others application segment in the global naphtha market consists of non-renewable applications. As per industry forecasts, the market share of this segment may also witness a significant decline in the years to come. The primary feedstock that is used for gasoline reforming and blending, and petrochemical cracking is naphtha. Geographically, the global naphtha market is led by the Asia Pacific with a market share that exceeds 50% both in terms of revenue and volume. Due to the expansion of industries like plastics, construction, and automotive, the naphtha markets in Taiwan, China, and India are witnessing high rates of growth. At present, the second largest naphtha market in the global naphtha market is North America which accounts for almost one fifth of the market share. North America's share in the global naphtha market is expected to witness decline in the years to come, due to factors like high prices of naphtha in this region, and greater preference for inexpensive and affordable alternatives. The latest trend prevailing in the North American naphtha market is the rising popularity of shale gas as a very good substitute for naphtha. Due to factors like low seasonal demand for naphtha and rising prices of crude oil, the share of the European region in the global naphtha market will decline in the next five years. Due to high dependence of the global naphtha market on non renewable raw materials, this market is characterized by high degree of price volatility. And in order to tackle this issue, manufacturers of naphtha commonly enter into long term contracts with the suppliers of raw materials. The presence of innumerable small and medium scale manufacturers makes the global naphtha market a highly fragmented one. Distribution plays a very crucial role in the global naphtha market and the success of this market gets determined by the distribution factor to a marked extent. The main threat facing the global naphtha market is that of forward integration form the suppliers of raw materials as a means to entering this industry. Some of the prominent players operating in the global naphtha market include Mitsubishi Chemical, British Petroleum, Total S.A., Shell Chemicals, SABIC, Chevron, Indian Oil Corporation, and ExxonMobil.