Market Dynamics
Drivers: The Emergence of Major End-Use Industries along with the Growth in the Foundry Industry is Driving the Furfural Market Growth
Furfuryl alcohol, which is also called 2-furylmethanol, is an organic compound made up of furan with a hydroxymethyl group added to it. Furfural comes from sugarcane bagasse and corncobs. Furfuryl alcohol is made by reducing Furfural with a catalyst. Most of the time, furfuryl alcohol is used as a solvent, but its main use is as a chemical intermediate in the making of many other chemicals, such as wetting agents, adhesives, and foundry resins.
Since 2016, there has been a lot of demand for furfuryl alcohol because it is being used more and more in industries like construction, agriculture, and foundry. The product is used in a wide range of resins and plastics. It is thought that the demand for furfuryl alcohol will rise due to a rise in rocket fuel research and development. The products are also an important part of making moulds for metal casting, which is done in the foundry industry.
With such applications of Furfuryl alcohol, the demand for the Furfural has increased to a larger extent owing to its industrial and other applications. With this, the global furfural market is witnessing a high demand from each and every segment of the industry; it may be from agriculture, manufacturing, or a chemical plant.
Drivers: The Emergence of Major End-use Industries with Major Applications of Furfural Products is Performing as a Key Driver for the Global Market
Furfural is used as a solvent or intermediate in many end-use industries, such as foundry, agriculture, paints and coatings, pharmaceuticals, refineries, chemicals, automotive, and construction, among others. Over the next few years, the growing construction industry is expected to increase the need for Furfural in refractory materials like ceramics, bricks, and fiberglass composites. It is also thought that the demand for Furfural will be driven by the growing need for sustainable products as fossil fuels run out.
According to the China Petrochemical Corporation, with a huge capacity of production, China became the second-largest refining economy in 2019. The U.S. is still the leader in the refining market. China's growth can be explained by a number of important factors, such as the fact that the country needs more oil as its population and economy grow. When refining is done too much and too often, the inventory corrodes, which can lead to financial losses. Furfural is used in petrochemical refining to make coatings that protect against corrosion and as a specialty solvent.
The U.S. refining industry is competitive because, among other things, crude oil prices are better, refineries are more advanced and complex, workers are highly skilled and flexible, and operating costs are low as the Furfural is a chemical feedstock that is used to make other industrial chemicals. China, the EU-28, the U.S., Japan, South Korea, India, Taiwan, Russia, Brazil, and Saudi Arabia, among other places, are expected to make more chemicals, which will increase the demand for Furfural in these economies.
Drivers: Growth in Foundry Industry to Propel Global Furfural Market
The metal casting industry is important to the safety and economic growth of many countries around the world. Foundries melt both non-ferrous and ferrous alloys and pour them into moulds so that they can harden into finished products. In the foundry business, Furfural and its derivatives are used to make moulds for casting metal. The foundry industry's growth is thought to be driven by the increasing production of metal castings, which is also thought to drive the demand for Furfural.
In the last ten years, the global metal casting industry has grown significantly. This is because people want lighter building materials, which has led to more aluminum foundries. The growth of the metal casting industry can also be attributed to good management practices and new technologies like automation, especially in Asia-Pacific, Europe, and North America.
Restraints: Fluctuating Raw Materials Prices may be a Major Barrier to the Growth of the Furfural Market
Changes in the price of the key raw material like corn cob can make the cost of making Furfural high, which could slow the growth of the market in the near future. Feedstock'sFeedstock's are used to make Furfural. Some of these are corncob, sugarcane bagasse, sunflower hull, and rice husk. Corncob, which is also known as grain maize, is the main raw material used to make Furfural because it gives a high yield and has more pentosane than other raw materials.
When there are changes in how much raw material is available, the price of that raw material, especially corncob, can change. Prices for Furfural have changed on the market because the prices of raw materials have gone up due to climate change. According to the EU-28 Report 2018 on Agricultural Commodities, the EU-28 countries produced 295.1 million tons of key cereals. Grain maize and corn cob mix made up about 23.4 percent of the production share of other cereals.
At the end of 2018, there was a small rise of 1.6% in the mix of grain maize and corn cobs. The prices of grain maize and corn cob mix kept going up and down until 2017. But this price increase could not match the biggest one in 2012. Changes in the price of corn cobs can make it more expensive to make Furfural, which could slow the growth of the market in the near future.
Future Growth Opportunities in Furfural Market
Growth of Green Chemicals Creating Wide Range of Opportunities in the Global Furfural Market
Chemical companies are moving towards the sustainable production of bio-based/green chemicals that focus on the 12 principles of green chemistry. Biotechnological processes like fermentation, biocatalysis, and enzymatic processes, among others, have been made possible by a shift in how green chemicals are made. The growth of the green chemicals market has been helped by the things we have talked about so far. In order to meet the rising demand for their products, companies that make green chemicals are increasing their production capacities and building new factories. They have combined their production and distribution channels to make their products easier to get to the market. Strategic alliances and mergers and acquisitions are important parts of this market and help companies improve their position in the market. The business activities of end-users have a big effect on the finances and operations of both suppliers of raw materials and manufacturers. Some of the reasons for furfural market growth are the growth of the green chemistry market, business sustainability programs, and new bio-based value chains.
Regional Analysis
The global furfural market is primarily segmented across three regions, namely, North America, Europe, and Asia-Pacific.
Which Region Accounts for Highest Demand for Furfural?
Where the Asia-Pacific is the dominant region with an estimated market share to rise up to 78% by 2030, followed by the Europe, which is anticipated to cover almost 12% of the global furfural market by 2030. Asia-Pacific has become the biggest market for furfural because of the growing production and growing number of industries using it. These industries include agriculture, food and beverage, pharmaceuticals, and refineries. The chemical and foundry industries are using more furfural, so the Asia-Pacific furfural market is expected to grow quickly. The growth of the Europe furfural market can be traced to the growth of the food and beverage and pharmaceutical industries over the last ten years.
In Europe, furfural is used to add flavor to foods like frozen dairy, baked goods, gravies, candies, meat products, drinks, and puddings, which is why Europe is the second dominant region in the said market domain. Since 2000, the furfural market in North America has grown a lot. This is because there are many well-established chemical and fertilizer companies in the area.
North America is expected to grow a lot in the near future because the pharmaceutical industry is growing, and more and more products are being used to make drugs. Also, the growing demand for different types of food and drinks in the region has led to more flavoring agents being used in the making of these products, which is boosting the market growth.
Segmental Analysis
The global furfural market is segmented by process and by end-use.
The by-process segmentation is further classified into the Chinese Batch Process and Quaker Batch Process, out of which the Chinese Batch Process contributes to the major share of the market with an expected market share to rise to 84% by 2030. The Chinese batch process is usually used in small-scale factories, most of which are in China, and have a large share of the market. China makes a lot of Furfural, and it is thought that the Chinese batch process makes Furfural on a larger scale. The Quaker Batch Process is second in terms of market share as it is expected to owe about 13% of the global furfural market by 2030. It is one of the oldest ways used to make Furfural. Bagasse from sugar cane is used as a raw material in the Quaker batch process. In this process, the feedstock and sulphuric acid (which acts as a catalyst) are mixed. The mixture is then heated to 153°C and reacted in a spinning spherical digester to form the end product.
When segmented with respect to the end-use, the furfural market is further classified into refineries, pharmaceuticals, and agriculture. The Refineries owe the major portion of the global furfural market with an estimated market share to rise at 52% by 2030, among all others. As the furfural is used as a solvent in refineries, it has a huge demand in the refining industry, which led to the market's overall growth on a global canvas. The pharmaceutical and the agriculture industries stay in the second and third spot respectively on account of the market share, which is anticipated to cover almost 15% and 13% respectively.
Impact of covid-19
COVID-19 had an unfavorable effect on the market development. Many businesses have been severely impacted by the outbreak, which has resulted in a global recession. This compels banks all across the globe to put initiatives into action. Numerous core banking, deposit accounting, and loan accounting systems are not intended for functional versatility. As a result, globally, banks and financial institutions emphasize business continuity planning. They are mainly responsible for ensuring that customer relations activities and branch distributions are not disrupted.
In many businesses, the outbreak substantially affected the working environment. Due to the constraints, many financial institutions and banks have been obliged to let their staff work from home. The finance system is dealing with late lease payments and rapid interest rate fluctuations, which has resulted in an enormous reconfiguration of the global financial system.
Market Recovery Timeline and its Challenges
The post-pandemic period will be significant for the global core banking software market. The market's growth is likely to be hampered due to privacy concerns, security of data, and skilled professionals working with advanced technologies. On the other hand, factors like the rising demand for cloud-based solutions from banking corporations and the growing demand for managing customer accounts from a single server will likely continue to drive the market growth over the forecast period. Overall, the recovery of the global core banking software will be quick.
