Butane Market Size (2024-2029):
The global butane market size was valued at USD 112.90 billion in 2023 and is expected to reach USD 149.28 billion by 2029. The market value is projected to expand at a CAGR of 4.1% during the forecast period 2024-2029.
Market Drivers:
The butane market growth is driven by the increasing LPG requirement from the residential industry. Also, there will be a continuous increase in the demand for LPG. So, in Asian nations like China and India, consumption will rise more consistently. Furthermore, the market in Southeast Asia, China, and India is anticipated to grow faster than current predictions. This is due to LPG's competitive price. In addition, the rate of installation of LPG distribution systems can replace conventional fuels and kerosene, and its ability to compete with other options with limited disposable income will determine how much is consumed in these nations.
The rising industrial application is further propelling the butane market. So, the petrochemical industry uses it as a feedstock to produce ethylene and other derivatives. In addition, it is utilized as a fuel for cigarette lighters and as a raw material in the manufacturing of base petrochemicals. It is also employed as an ingredient in petrol in this process. Furthermore, the majority of regular gas is blended with petrol, especially during the colder months when isobutane is in scarcity as a result of isomerization. It also converts regular butane into isobutane. Furthermore, roughly 27 million cars worldwide run on Autogas, a blend of butane and propane. It is the third most used automotive fuel worldwide.
Market Restraints:
Groundwater pollution is limiting the growth of the butane market. Methyl tert-butyl ether (MTBE) leak contaminates the water in the ground. This will hinder market expansion. In addition, ethanol's increasing use of ethanol as a petrol alternative could reduce the butane market. Moreover, the gas poses a significant risk to human health when inhaled. So, certain regulatory requirements are set that must be met by the global industry. As a result of the Environmental Protection Agency's (EPA) strict regulations on fuels and additives, MTBE is no longer allowed to be blended into petrol. Therefore, this is done to tackle the contaminated groundwater issue.
Market Opportunities:
The increasing industrialization in Africa and the Middle East is presenting opportunities for the butane market. According to EIA's International Energy, energy consumption across the MEA increased by almost 20 percent in each region. This is because of factors like rapid population growth, easier access to energy markets, and economic expansion, energy consumption is rising. Similarly, emerging nations, including South Africa, provide high potential for market expansion, with relatively low per capita LPG consumption given their economic level.
Market Challenges:
The fluctuation in raw material prices is hindering the expansion of butane market value. Global economic slowdown, inter-nation geopolitics, and multiple regional conflicts and wars are affecting LPG's cost of production, transportation, and insurance. So, this ultimately decreases the market growth. In addition, it is a liquid gas formed from petroleum that is obtained from gas processing facilities as a byproduct of the production and refinement of crude oil. Similar to the price of crude oil, petrol prices vary daily. Further, because of factors like changes in supply and demand along with fluctuations in the crude oil price, butane rates are never settled. Therefore, it is expected that the volatility of oil prices will negatively impact the producer's earnings.
|
REPORT METRIC |
DETAILS |
|
Market Size Available |
2023 – 2029 |
|
Base Year |
2023 |
|
Forecast Period |
2024 - 2029 |
|
CAGR |
4.1% |
|
Segments Covered |
By Type, Application, End-user Industry, and Region. |
|
Various Analyses Covered |
Global, Regional & Country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview of Investment Opportunities |
|
Regions Covered |
North America, Europe, APAC, Latin America, Middle East & Africa |
|
Market Leaders Profiled |
British Petroleum, Chevron Corporation, China National Petroleum Corporation (CNPC), Valero Energy Corporation, Conocco Phillips Inc., Devron Energy Corporation, Exxon Mobil Corporation, Proton Gases India Pvt. Ltd., Perenco, Royal Dutch Shell plc, Linde AG, TotalEnergies, Praxair, and Others. |
Market Segment Analysis:
Butane Market – By Type:
The N-butane segment holds the maximum share of the global butane market. It has become quite popular among various industries because it offers various uses. Also, this contributes significantly to improving the quality of conventional fuels like petrol or diesel as we move towards cleaner energy sources. Moreover, because it can lower greenhouse gas emissions, N-butane is a preferred ecologically friendly refrigerant due to growing awareness of climate change. So, this makes it a widely used option.
Butane Market – By Application:
The LNG segment is the leading category in the global butane industry. It is expected to expand at a higher CAGR in the coming years. In addition, a larger proportion of butane is used in LPG mixtures in the Czech Republic, Greece, Hungary, Italy, Spain, and Turkey. It is therefore anticipated that this will promote the market's LPG segment's expansion. Furthermore, it is extensively utilized for different purposes. This includes industrial, commercial, farming, power generation, cooking, heating, and other recreational uses. The segment is driven mainly by these larger applications. Moreover, it is believed that the demand for butane from gas producers will rise. Hence, this is due to the expanding residential sector in Asian nations like China and India.
Butane Market – By End-user Industry:
The residential and commercial segment holds a significant portion of the butane market share. Rises in living standards, urbanization, and population increase are the main reasons driving the high demand for LPG as a home fuel in emerging nations. Furthermore, urbanization and rapidly growing populations require more energy resources, and LPG is a cost-effective and dependable option for heating, cooking, and lighting.
Market Regional Analysis:
Asia Pacific holds a significant share of the global butane market. It is anticipated to grow at a faster pace during the forecast period. The APAC market is projected to expand rapidly due to factors such as increased urbanization and the need for petrol from refineries and chemical processing units. In addition, industry players will have multiple growth prospects because of favorable government policies and incentives for using LPG gases. Additionally, the fast-rising automotive and construction sectors in developing nations like China and India are fueling the regional market expansion. Moreover, recovering post-COVID economic recovery and increasing processing capacity at three new PDH plants are the main drivers of the butane industry in China. On the other hand, to meet petrochemical demands, it is expected that domestic sales in South Korea will continue to expand.
North America is expected to achieve an elevated growth rate in the butane market. The United States is the primary source of income because of the growing market for natural gas liquids and the policies that encourage it. Further, one of the major exporters of LPG is the United States. Also, the world's highest production of natural gas liquids was produced in the United States, producing roughly 4.3 million barrels per day. The US leads the world in LPG exports due to its high production and robust Asian demand, but other regions face difficulties. Additionally, changes in the global trade pattern are also driven by the US's production and exports of LPG. Construction of new refineries costs US petrochemical producers a total of $200 billion. In addition, the area is expanding in line with the petrochemical industry. Leading providers of petrochemicals in the nation are ExxonMobil, LG Chem, Dow Chemical Company, and DuPont.
Europe is predicted to register considerable growth in the future. To keep up with demand, The region is shifting from traditional energy sources to more cost-effective and environmentally friendly renewable energy options. Also, governments and corporations in the European Union are emphasizing fossil fuel energy technology and goods. Hence, LPG's various advantages continue to make it more popular than coal. Moreover, the butane market is positively impacted by the EU's evolving emission standards. The regional industry is anticipated to expand because of laws like 443/2009/EC to reduce vehicle carbon emissions and the commitments made by various businesses to achieve net-zero emissions. Furthermore, the popularity of liquefied natural gas, which is less expensive than petrol and diesel, is predicted to fuel Europe's market growth.
Latin America accounts for a small percentage of the global butane market. The residential and business consumers account for over 80 percent of the region's LPG consumption. This drives the need for butane. In addition, the lack of regional industrial capacity and the decline of natural gas output in Latin America are the main causes of its poor expansion. On the other hand, the US shale boom has produced an increasing surplus.
Middle East and Africa are prominent suppliers in the butane market. This is because of newly discovered and unrelated natural gas reserves. Thus, ME exports are predicted to grow steadily. Also, the majority of Middle Eastern LPG firms are owned by governments. Further, regional oil and gas explorers and refiners are also the main gas providers to the MEA nations. Furthermore, the second largest LPG supplier in the area is the National Iranian Oil Corporation. Apart from them, the MEA industry is dominated by businesses like Kuwait National Petroleum (Kuwait) and Abu Dhabi Oil Refining Company (Abu Dhabi).
Impact of COVID-19 on the Butane Market:
The butane market was positively impacted by COVID-19. It is mostly used in the residential sector. Also, The use of LPG cylinders increased during the first half of 2020 as families spent most of their time at home. Further, major economies globally also witnessed a surge in the consumption of LPG. For instance, India is the second largest LPG consumer in the world. Domestic LPG sales rose by more than 10 percent between April 2020 and February 2021, according to Oil Market Statistics. Hence, there was a greater need for butane in the pandemic.
Market Key Players:
Market Key Developments:
In February 2023, Calor Gas announced that it would simplify its operations by ceasing to produce its 4.5-kilogram butane cylinders. Last year, the corporation blamed the COVID-19 pandemic-related labor shortage and strong seasonal demand for the paucity of 4.5 kilograms and 7 kg cylinders in the United Kingdom.
Access the study in MULTIPLE FORMATS
Purchase options starting from $ 1800
Didn’t find what you’re looking for?
TALK TO OUR ANALYST TEAM
Need something within your budget?
NO WORRIES! WE GOT YOU COVERED!
Call us on: +1 888 702 9696 (U.S Toll Free)
Write to us: [email protected]
Reports By Region