Propylene Oxide Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Key Highlights

• Over the medium term, the growth of the propylene oxide market is expected to be driven by the rising demand for polyether polyols for polyurethane production, as polyurethane is used in various end-user applications, such as bedding, automobile carpet underlay insulation, building thermal insulation, wrapping, industrial refrigeration, door frame molding, columns, balusters, window headers, and pediments.
• However, health hazard caused by prolonged contact with exposure is a major factor restricting the growth of the global market for propylene oxide. Also, volatility in raw material prices and the emergence of low-priced substitutes such as alkylene carbonate are expected to hinder the propylene oxide market.
• Asia-Pacific dominated the market across the world, owing to the robust growth of construction activities in the region.

Key Market Trends

Building and Construction Segment to Dominate the Market Demand

• The building and construction industry is the largest consumer of propylene oxide. Propylene oxide is used in numerous applications in the construction industry, such as flexible and rigid polyurethane products, coatings, elastomers, adhesives, and sealants.
• The increasing use of propylene derivative, polyurethane, in the construction industry has widely helped the propylene oxide market to have a stronghold in the construction and infrastructure segments.
• Asia-Pacific has been witnessing strong growth in residential as well as commercial construction in countries such as India, China, the Philippines, Vietnam, and Indonesia, which is further expected to increase the demand for propylene oxide during the forecast period.
• China's construction activity witnessed a growth of 1.3% in 2020. The infrastructure expenditure in China has been rising lately, with significant growth in infrastructure in the transportation and social sectors. To boost economic growth, the government approved 64 major projects with total investments of CNY 273.4 billion.
• According to the National Development and Reform Commission, China, the growing demand for housing is expected to drive the residential construction in the country, both in the public and private sectors. The new hotel projects in the country increased by about 15% in 2020; the increase in construction of tall buildings and hotels is driving the propylene oxide market.
• Hence, all such trends in the global construction industry are expected to positively influence the demand for propylene oxide during the forecast period.

Asia-Pacific Region to Dominate the Market

• The Asia-Pacific region dominated the global market share. The robust growth of the construction sector is the factor driving the demand for the propylene oxide market in the region.
• Currently, China has numerous airport construction projects, which are either in the development or planning stage. According to the International Air Transport Association, IATA, the domestic air passengers in China in 2020 were 600 million, which is expected to cross 720 million by 2021. The high demand for aviation has led to the government's decision to introduce an airport construction project, which includes huge investments in terminals and runways.
• China is the largest consumer of electric vehicles, and in 2021, China's electric vehicles increased by more than 50%. Thus, increased electric vehicle sales in China will drive the propylene oxide market.
• China also has the world's second-largest market for pharmaceuticals and is the fastest emerging market for the sector. The country has a large and diverse domestic drug industry, comprising around 5,000 manufacturers, of which many are small- or medium-sized and base their businesses on generics, active pharmaceutical ingredients (APIs), or traditional Chinese medicine.
• In India, government initiatives, such as the Swachh Bharat Mission, promote health and hygiene. Such initiatives, along with the growing usage of soaps and detergent, have led to the growth of the soap manufacturing industry, which is further boosting the demand for propylene oxide in the country.
• Hence, all such market trends are expected to add to the demand for propylene oxide in the region during the forecast period.

Competitive Landscape

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