Global Butane Market Grows Steadily at a CAGR of 5.85%

Introduction

Butane is odorless, tasteless, gaseous paraffinic hydrocarbons (carbon and hydrogen molecules). The carbon atoms in the molecule of normal butane, also known as n-butane, are united in a straight chain. In contrast, isobutane contains a branching chain. Both chemicals are present in natural gas and crude oil and are created in substantial amounts during the refining of crude oil to produce gasoline. As propellants in aerosol deodorants, butane has replaced chlorofluorocarbons (CFCs).

Market Dynamics

Rising Demand for LPG from the Residential Sector Drives the Global Market

The demand for LPG will continue to increase at a consistent rate. Asian nations, such as China and India, will experience a faster rise in demand. Butane is a necessary component of LPG. Consumption in these nations will be contingent on the construction of distribution infrastructure and the rate at which LPG can replace conventional fuels like kerosene and compete for limited discretionary incomes. LPG demand from residential and commercial sectors will continue to contribute to future demand growth since latent LPG demand is substantial in most nations. New LPG markets in China and South Korea have been generating an increase in demand and displaying potential opportunities. In the coming years, the butane market will likely increase due to the anticipated expansion of the LPG industry due to new LNG projects and refineries.

Growing Industrialization in the Middle East and Africa Creates Tremendous Opportunities

According to EIA's International Energy Statistics database, between 2010 and 2016, energy consumption in the Middle East and Africa increased by around 20% in each region. Particularly, energy consumption has expanded throughout the Middle East and Africa due to economic expansion, greater access to energy markets, and rapidly expanding populations. Moreover, rising nations such as South Africa have a very low LPG use per capita relative to their wealth, indicating a tremendous market growth potential. In addition, the long-term demand predictions for LPG in these nations indicate the market potential for clean-burning fuels such as butane, which is an excellent energy source. Rising energy demand in the Middle East and Africa will generate attractive growth opportunities for butane producers.

Regional Analysis

Asia-Pacific is the most significant shareholder in the global butane market and is estimated to grow at a CAGR of 6.39% during the forecast period. The Asia-Pacific butane market will expand due to increased urbanization and rising demand for gas from refineries and chemical processing facilities. Government rules and incentives encouraging LPG gases will provide several growth prospects for market vendors. Market expansion is driven by the rapidly developing construction and automotive industries in emerging economies such as China and India. The addition of processing capacity drives the Butane market in China at three new PDH plants and the recovery of economic development post-COVID. In order to fulfill petrochemical needs, South Korean domestic sales are expected to continue their upward trend this year. In the Asia-Pacific region, the leading importing economies of India and Indonesia will be the principal drivers of butane imports, as LPG is widely used as a cooking fuel without significant competition from natural gas.

North America is estimated to grow at a CAGR of 5.81% over the forecast period. Due to increased demand for natural gas liquids and favorable government regulations, the United States is the leading revenue generator. The United States is a significant exporter of LPG. In 2018, natural gas liquid output in the United States was over 4,3 million barrels per day, the highest in the world. Large U.S. production and robust demand from Asia have propelled the United States to the top rank for LPG exports while posing problems for other regions. In addition, LPG production and exports from the United States are influencing global trade patterns. In the United States, petrochemical producers invest USD 200 billion in constructing new petrochemical facilities. It is expanding as the petrochemical industry expands.

Key Highlights

• The global butane market was valued at USD 93.33 billion in 2022. It is estimated to reach USD 155.68 billion by 2031, growing at a CAGR of 5.85% during the forecast period (2023–2031).
• Based on application, the global butane market is segmented into LPG, petrochemicals, refineries, and others. The LPG segment owns the highest market share and is projected to grow at a CAGR of 6.03% over the forecast period.
• Asia-Pacific is the most significant shareholder in the global butane market and is estimated to grow at a CAGR of 6.39% during the forecast period.

Competitive Players

Competitive Players

The key players in the global butane market are BP, Exxon Mobil Corporation, Chevron Corporation, Valero Energy Corporation, China Petrochemical Corporation (Sinopec Group), and many others.

Recent Developments

Market News

• In January 2023, Calor Gas declared that it would discontinue its 4.5kg butane cylinders on 1 February 2023 to "simplify" its operations. Last year, the company attributed a scarcity of 4.5kg and 7kg cylinders in the United Kingdom to high seasonal demand and a labor constraint caused by the COVID-19 epidemic.
• In January 2023, The management of Martin Midstream Partners L P plans to exit the butane optimization business (buying and storing butane inventory in the summer months for resale in the winter) following the butane selling season in the second quarter of 2023, thereby reducing commodity risk exposure, earnings volatility, and working capital needs.

Segmentation

Global Butane Market: Segmentation

By Applications

• LPG
• Petrochemicals
• Refineries
• Others

By Regions

• North America
• Europe
• Asia-Pacific
• RoW