Published October 2020
The petrochemical industry covers a wide spectrum of chemicals that can be produced from several different carbon sources (crude oil, natural gas, coal, and biomass). The petrochemical industry typically produces a range of small-sized molecules by subjecting a selected feedstock to a set of chemical reactions. The produced molecules are part of the organic chemistry spectrum as they contain carbon atoms; the sole exception is ammonia, which is produced from natural gas but does not contain any carbon atom.
For the purpose of this report, the focus is on major sources of petrochemicals including natural gas, natural gas liquids, crude oil, and coal. Biomass is excluded as it remains extremely limited for the production of petrochemicals. The choice of feedstock(s) used by a petrochemical unit is a key determinant for the overall economics of production and is therefore, critical; raw material cost is a major component in the overall cost of production of petrochemical producers.
The choice of feedstock also determines the amount of coproducts generated, which also affects the overall economics of a given unit. This is the second publication of the CEH Petrochemical Feedstocks report, replacing three previously published reports, Natural Gas, Natural Gas Liquids (NGLs), and Petroleum Liquid Feedstocks—Naphtha and Gas Oil. This report presents an overview of the world petrochemical feedstock supply/demand situation for natural gas, natural gas liquids (NGLs), and petroleum liquid feedstocks (light and heavy naphtha). NGLs include ethane, propane, butanes, and pentanes plus (C5+), also known as natural gasoline.
Natural gas is consumed primarily for power generation, industrial uses, residential and commercial heating, and transportation. The primary uses for heavy naphtha are the isolation of aromatics (benzene, toluene, and xylenes) and the production of gasoline, while light naphtha is the preferred feedstock for chemicals, primarily in steam cracking to produce ethylene. NGLs, extracted from natural gas processing facilities and petroleum refineries, are significant feedstocks for ethylene production. The shale boom in North America has driven an increase in the availability of ethane and created a shift in the feedstock slate to ethylene crackers to lighter feeds. This trend is expected to continue. The intent of this report is not to cover each and every feedstock market in detail primarily because these products are used mainly as energy sources. The objective is to provide an overview of the regional and global feedstock trends currently underpinning the global petrochemical industry.
While fossil fuels (coal, crude oil or petroleum, natural gas liquids, and natural gas) are the primary sources of basic petrochemicals, only about 9–10% of the global fossil fuel production is ultimately used as a petrochemical feedstock; their primary usage remain the production of energy. Each region has developed its own feedstock specificities depending on the resource and technology available and the characteristics of the domestic markets and environmental standards of the region. In 2019, naphtha was the largest-volume petrochemical feedstock used globally, followed by natural gas, coal, and ethane. The largest consumers of petrochemical feedstocks were North America (mostly the United States), Northeast Asia (largely mainland China), the Middle East, the CIS and Baltic States, and Western Europe, together accounting for more than 80% of the global consumption of petrochemical feedstocks.
The following pie chart presents world consumption of petrochemical feedstocks:
Over the past decade, the use of ethane has gained momentum because of the development of new light-fed steam cracking capacity in the Middle East and North America (shale boom). The use of coal for the production of chemicals has also increased at a sustained rate over the last decade, driven by the swift development of the coal chemical industry in Northeast Asia. Coal-to-chemical processes are almost exclusively used in mainland China, which has capitalized on its abundant coal reserves to reduce its external dependency on both energy and chemical feedstocks. While the world’s new requirements for fuels is slowing down gradually, new technologies are being developed to redesign the overall refinery product slate. New pollution control measures are also modifying mainland China’s coal-to-chemicals strategy. The present report analyzes regional trends and changes currently affecting the wider petrochemical industry including the impact of the COVID-19 pandemic.
For more detailed information, see the table of contents, shown below.
IHS Markit’s Chemical Economics Handbook – Petrochemical Feedstocks is the comprehensive and trusted guide for anyone seeking information on this industry. This latest report details global and regional information, including
IHS Markit’s Chemical Economics Handbook – Petrochemical Feedstocks has been compiled using primary interviews with key suppliers and organizations, and leading representatives from the industry in combination with IHS Markit’s unparalleled access to upstream and downstream market intelligence and expert insights into industry dynamics, trade, and economics.
This report can help you
- Identify trends and driving forces influencing chemical markets
- Forecast and plan for future demand
- Understand the impact of competing materials
- Identify and evaluate potential customers and competitors
- Evaluate producers
- Track changing prices and trade movements
- Analyze the impact of feedstocks, regulations, and other factors on chemical profitability