Benzene Market

Increasing demand for benzene as styrene to boost the market growth

The automotive industry is increasing continuously with the introduction of a new range of electric vehicles has also resulted in an increase in demand for benzene as styrene is used in the production of tires and several body parts of both diesel or gasoline-powered vehicles and electric vehicles.

According to Niti Aayog, India is among the fastest-growing country in the automotive sector witnessing a compounded annual growth rate of 4% from 2011 to 2020. Additionally, according to the National Bureau of Statistics of China in 2020, tire production in the country reached to 807.47 million. Thus, this increasing demand for automobiles in different countries is resulting in an increase in demand for benzene. According to the International Energy Agency (IEA) in 2018, the U.S. is home to around 40% of petrochemical production.

Thus, the increasing petrochemical industry in the U.S. and North America as well as the availability of crude oil is acting as a driving factor for increasing the demand for benzene in the region.

Moreover, Ethylbenzene is used to produce most of the styrene that finds its usage in the manufacturing of rubber tires, plastic packaging, several automobile parts (instrumental panels, knobs, trim, energy absorbing door panels, and sound dampening foam), and electronic equipment. Thus, all these factors contribute to the increasing demand for ethylbenzene.

The US Food and Drug Administration (FDA) has published final guidelines in 2024 to hasten the reformulation of pharmaceutical goods that contain inactive chemicals made with benzene, a chemical the agency has classified as a "known carcinogen." The FDA stated that it "encourages manufacturers to implement reformulation as soon as possible" in a release. Given the importance of public health, the FDA is releasing this recommendation, which will take effect right away and require no more comments.

2024 saw the discovery of elevated concentrations of the carcinogen benzene in a number of benzoyl peroxide (BPO) acne treatments from well-known manufacturers, such as Clinique, Proactiv, Clearasil, and others. Independent testing lab Valisure LLC petitioned the US Food and Drug Administration (FDA) to recall treatments impacted by high concentrations of the carcinogen. Great Orient Chemical Pte. Ltd.'s 50% ownership was acquired by Saudi Arabia's Farabi Petrochemicals Company in 2023. LAB, or linear alkyl benzoene, is produced in large quantities and is utilized in home and laundry products. Great Orient Chemical Taicang Co.

Ltd., which runs multiple petrochemical complexes around the nation, is owned exclusively by the latter.

The manufacturing of styrene butadiene rubber heavily utilizes the derivative styrene (SBR). SBR is mostly used to make tires for automobiles and other light-weight vehicles. SBR is an excellent material for meeting the high performance and durability requirements of the tire industry since it has special qualities including reduced rolling friction, good grip during braking, and abrasion resistance. In addition to tires, SBR is used to make shoe bottoms, pipes, gaskets, wire insulation, and conveyor belts. The packaging industry makes extensive use of polystyrene because of its superior durability, light weight, flexibility, and moisture resistance.

Emerging economies like India and China have experienced rapid e-commerce growth during the past ten years. Due to the increasing purchasing power and improved accessibility provided by e-commerce firms like Alibaba, Flipkart, and Amazon this expansion is most likely to continue. One of the world's fastest-growing e-commerce markets is India.

The National Investment Promotion and Facilitation Agency projects that by 2030, internet retail in India would make up 37% of the whole organized retail market. Increased smartphone and internet usage, as well as creative marketing tactics, are expected to encourage more people to purchase online. The packaging industry is likely to increase concurrently with the ecommerce sector throughout the forecast period, propelling market growth. Thus, the increasing demand in the Benzene for styrene market driving the growth of the Benzene market revenue.

The automotive sector plays a pivotal role in the Global Benzene Market Industry, as benzene-derived products are integral to manufacturing tires, plastics, and synthetic fibers. The ongoing advancements in automotive technology, particularly in electric vehicles and lightweight materials, are likely to bolster the demand for benzene. As the industry adapts to new standards and consumer preferences, the market for benzene is anticipated to flourish. By 2035, the Global Benzene Market could reach 93.9 USD Billion, reflecting the automotive sector's influence on benzene consumption and its derivatives.

The Global Benzene Market Industry is experiencing a surge in demand for petrochemicals, which are essential for producing various chemicals and materials. Benzene serves as a fundamental building block in the synthesis of styrene, phenol, and other derivatives. As industries such as automotive, construction, and consumer goods expand, the need for these petrochemical products increases. This trend is projected to contribute significantly to the market's growth, with the Global Benzene Market expected to reach 48.9 USD Billion in 2024. The continuous evolution of technology and processes in petrochemical production further supports this demand.

The pharmaceutical industry is increasingly relying on benzene derivatives for the production of various medications and health-related products. Benzene is utilized in the synthesis of active pharmaceutical ingredients, which are crucial for developing effective treatments. As global health awareness rises and the demand for innovative therapies grows, the Global Benzene Market Industry is poised for expansion. The integration of benzene in pharmaceutical applications not only enhances product efficacy but also contributes to the overall market growth, indicating a promising future for benzene in this sector.

Emerging markets are becoming increasingly significant in the Global Benzene Market Industry, driven by rapid industrialization and urbanization. Countries in Asia-Pacific and Latin America are witnessing substantial economic growth, leading to heightened demand for benzene and its derivatives. This trend is expected to propel the market forward, as these regions invest in infrastructure and manufacturing capabilities. The anticipated compound annual growth rate of 6.12% from 2025 to 2035 underscores the potential of these emerging markets to shape the future landscape of the benzene industry.

The Global Benzene Market Industry is influenced by stringent regulatory frameworks aimed at controlling benzene emissions and ensuring environmental safety. Governments worldwide are implementing regulations to mitigate the health risks associated with benzene exposure, which may drive innovation in cleaner production methods. While these regulations present challenges, they also encourage the development of sustainable alternatives and technologies. Companies that adapt to these regulations may find new opportunities for growth, potentially leading to a more responsible and environmentally friendly benzene market.

By Region, the study segments the market into North America, Europe, Asia-Pacific, Latin America, Middle east & South Africa. Asia-Pacific Benzene dominating market accounted for USD 20 billion in 2021 and is expected to exhibit a 6.12 % CAGR during the study period. This is attributed to the expanding end-use industries such as the chemical industry, packaging, automobile, pharmaceutical, and others in the region. According to International Institute for Sustainable Development (IISD) in 2021, the chemical industry in the Asia Pacific accounted for around 45% of chemical manufacturing and 7% of  GDP.

Further, the major countries studied are: The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3:  BENZENE MARKET SHARE BY REGION 2021 (%)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Europe Benzene market accounts for the second-largest market share due to the growing demand for the product from various applications, including the styrene industry. Further, the Germany Benzene market held the largest market share, and the UK Benzene market was the fastest growing market in the European region

The Asia-Pacific Benzene Market is expected to grow at a CAGR of 6.12 % from 2022 to 2030. This is because of the region's increasing usage of benzene in construction and automobile products, as well as the expanding demand for Benzene from the flooring and tire industries in developing nations like China and India. Moreover, China Benzene market held the largest market share, and the India Benzene market was the fastest growing market in the Asia-Pacific region

For instance, India Benzene market is the favored destination for Benzene manufacturers due to the infrastructure projects. On the other hand, Japan is famous for the civil engineering industry. Hence, Asia-Pacific is anticipated to register the highest growth rate over the forecast period from 2022–2030.

Major market players are spending a lot of money on R&D to increase their product lines, which will help the Benzene market grow even more. Market participants are also taking a range of strategic initiatives to grow their worldwide footprint, including new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the Benzene industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market environment.

One of the primary business strategies adopted by manufacturers in the  Benzene industry to benefit clients and expand the Benzene market sector is to manufacture locally to reduce operating costs. In recent years, Benzene has provided some of the most significant benefits.

SIBUR (Russia) is the largest integrated petrochemical company in Russia and one of the fastest-growing companies in the petrochemicals industry. Companies’ solutions find application in a variety of industries across the globe, including agriculture, construction, food, pharmaceutical, healthcare, and automotive industries. In July 2020, SIBUR has announced the benzene separation plant that is equipped with an extractive distillation unit in the Kstovo site in Russia. This extractive distillation unit efficiently separates the non-aromatic hydrocarbons and significantly increases the productivity of the overall industries.

Also, Covestro AG (Covestro) (Germany) is a provider of high-tech polymers. It develops and manufactures raw materials for polyurethanes, and their derivatives, coatings, adhesives and other specialties, polycarbonates, and specialty chemicals. The company also manufactures and markets chlorine and by-products such as styrene. The company provides its offerings to various markets such as automotive, construction, fashion, and sportswear, electrical and electronics, cosmetics, health, chemical, and wood processing and furniture. It operates research laboratories, technical service centers and sales offices across the world.

In June 2021, Total and Covestro have announced their partnering that has helped to boost the overall growth of the benzene industry. Their partnership has brought in several advancements in the benzene industry, such as an improved production rate of 2000 tons of benzene with higher quality and ISCC-plus-certified, alternative solutions for sustainable end-user products such as insulation boards, automotive parts, cooling units, and so on.