The market for diethylene glycol (DEG) is expected to register a CAGR of over 4% during the forecast period. Major factors driving the market studied are the rising demand in the construction industry and increasing demand in paints and coatings. On the flipside, toxic nature of diethylene glycol and unfavorable conditions arising due to the COVID-19 outbreak are the major restraints which are hindering the growth of the market.
- Rising demand for diethylene glycol as a chemical intermediate is expected to offer various opportunities for the growth of the market.
- By end-user industry, the plastics segment is expected to dominate the market, owing to the growing use of diethylene glycol as plasticizer in making plastics, such as polyurethane.
- The Asia-Pacific region dominated the market across the world, with the largest consumption from countries, such as India and China.
Key Market Trends
Increasing Demand from the Plastics Industry
- Diethylene glycol is an organic compound which is produced by partial hydrolysis of ethylene oxide. It is a colorless, practically odorless, low volatility, and low viscosity liquid with a sweet taste.
- Due to the increasing use of diethylene glycol as a raw material for producing plasticizers for paper, cork, and synthetic sponges, the demand for diethylene glycol is rising in the plastic industry, which is expected to drive its market during the forecast period.
- Diethylene glycol is widely used for producing plastic materials, like polyurethane, which are used for insulation of refrigerators and freezers, owing to which the demand for polyurethane is increasing, and consequently, the demand for diethylene glycol market is also rising.
- The global value of plastics is expected to reach USD 700 billion in 2025, which is likely to boost the diethylene glycol market during the forecast period.
- Owing to all the above-mentioned factors for diethylene glycol, its market is expected to grow rapidly over the forecast period.
The Asia-Pacific Region to Dominate the Market
- The Asia-Pacific region is expected to dominate the market for diethylene glycol during the forecast period. In countries, like China and India, owing to the increasing government spending on infrastructure development and rapid industrialization, the demand for diethylene glycol has been increasing in the region.
- The increasing need for products, such as polyester resins and polyurethanes, in various end-user industries, including construction and building, consumer goods, and automotive, is projected to boost the demand for diethylene glycol in the region, as it acts as a chemical intermediate for their production.
- Diethylene glycol is used in various applications such as raw material for the production of polyester resins and plasticizers, humectants, solvent for petroleum inks, selective solvent for aromatics in petroleum refining, solvent in textile dyeing, and raw material for the production of lubricants, emulsifiers, and demulsifiers, owing to which the demand for diethylene glycol is increasing in the region.
- Furthermore, owing to the excellent hygroscopicity and low volatility of diethylene glycol, it is widely used in gas drying applications, like acting as dehydrating agent in drying of natural gas.
- The construction industry in Asia-Pacific is projected to register a CAGR of over 5% during the forecast period, owing to the increasing population, urbanization, and industrialization, which may create high demands for diethylene glycol, and therefore, propel the diethylene glycol market in the region.
- Additionally, the paints and coatings market in the region is projected to register a CAGR of over 5% and would reach USD 100 billion by 2025, which would create lucrative opportunities for the growth of the diethylene glycol market.
- Some of the major companies operating in the Asia-Pacific region are Reliance Industries Limited, Royal Dutch Shell PLC, and Tokyo Chemical Industry Co. Ltd.
- The aforementioned factors, coupled with government support, are contributing to the increasing demand for diethylene glycol during the forecast period.
The diethylene glycol (DEG) market is fragmented with top players accounting for a marginal share of the market. Some key companies in the market include Royal Dutch Shell PLC, Reliance Industries Limited, Huntsman International LLC, Dow, and SABIC.
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