The market for alpha olefins is expected to register a CAGR of over 5% during the forecast period. The primary factor driving the market studied is increasing oil and gas exploration activities. On the flip side, the non-biodegradable nature of polyethylene, one of the major application segments, is hindering the growth of the market.
- The development of catalysts for selective oligomerization of ethylene to produce linear alpha olefins is expected to offer various opportunities for the growth of the market.
- The drilling fluids application is expected to dominate the global alpha olefins market over the forecast period.
- Asia-Pacific region represents the largest market and is also expected to be the fastest-growing market over the forecast period owing to the increasing consumption from countries, such as China, India, and Japan.
Key Market Trends
Drilling Fluids Application to Dominate the Market
- The consumption of drilling fluids has witnessed massive growth over the years due to the growing oil and gas exploration and production activities worldwide.
- Drilling fluids are used as coolants and lubricants, and it helps to maintain the pressure during the drilling operation. Additionally, their addition to wellbore facilitates the drilling process by suspending cuttings, stabilizing exposed rock, and provides buoyancy.
- Global oil production for 2019 stood at 80,622,000 bbl/day, an increase of almost 6% from the previous year. Global natural gas production increased from 3867 BCM in 2018 to 3937 BCM in 2019, an increase of nearly 2%.
- ADNOC company announced its intention to grow its conventional drilling activity by about 40% by the end of 2025, and in the process, substantially ramp up the number of its unconventional wells in its upstream division over the coming few years. The company’s new targets are in line with its aim of producing about four million barrels of oil per day by the end of 2020 and producing approximately five million barrels of oil per day by 2025.
- The demand for drilling fluids is expected to increase over the forecast period considerably due to factors mentioned above.
Asia-Pacific to Dominate the Market
- The Asia-Pacific region is expected to be the dominant market in alpha olefins consumption. In countries like China, Japan, South Korea, India, and the Southeast Asian nations, the demand for alpha olefins is increasing. China is also the largest producer of polyethylene, catering to the market worldwide.
- Asia-Pacific is also expected to be the fastest-growing market during the forecast period, with increasing demand from applications in polyethylene and synthetic lubricants.
- Alpha olefins are mostly consumed to manufacture polyethylene, such as linear low-density polyethylene (LLDPE) and high-density polyethylene (HDPE), which are used in various applications ranging from packaging to pipes.
- The Asian cosmetics and personal care market is becoming popular worldwide, and it is expected to grow at a rate of more than 5% during the forecast period, with Japan, Singapore, South Korea, Hong Kong, and China, among the top 10 global cosmetics exporters. Due to broad product applications, such as added hair color-retention benefits and formulas positioned for the hair, scalp, and body, customizable performance attributes and biodegradability, the use of alpha-olefin sulfonate (AOS) surfactants is increasing.
- Thus, rising demands from the applications mentioned above are expected to drive the growth of the alpha olefins market in the Asia-Pacific region.
The alpha-olefin market is partially consolidated with the presence of both international and domestic players in the market. The major companies include Chevron Phillips Chemical Company, INEOS, SABIC, Sasol, and Royal Dutch Shell PLC, among others.
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