Ethane Market Expected to Reach $18.5 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Ethane Market," The ethane market was valued at $12.8 billion in 2021, and is estimated to reach $18.5 billion by 2031, growing at a CAGR of 3.8% from 2022 to 2031.

Ethane is the second most abundant natural gas. Its chemical formula is C2H6 and exhibits as a colourless and odourless gas. Ethane is a structurally simplest hydrocarbon that contains a single carbon-carbon bond and mainly belongs to the paraffin series family. Ethane is predominately used to produce ethylene, petroleum feedstock to make plastic, and other chemical intermediators. 

Sustainable economic growth coupled with increasing demand for consumer goods has led the automotive, transportations, and industrial sectors to witness a significant growth in the ethane market. Ethane-1,2-diol is synthesized from ethene via epoxyethane, which is further used to make polyester fibres, resins, films, and also used as a coolant in cars. This factor is likely to boost the ethane market. Furthermore, there is an oversupply of ethane gas in the U.S., due to which prices of ethane have kept low or below the prices of natural gas. This factor is anticipated to drive the ethane market.  

However, availability of various substitutes over ethane gas is likely to hinder the market. For instance, methane, propane, and other natural gases are used over ethane. This factor is likely to hamper the market growth during the forecast period.  

The emergence of high ethane and their derivatives that produce little or no VOCs has surged the potential end uses of ethane among several end use sectors. For instance, ethane is mainly used for the production of ethene, acetic acid, and other organic compounds. The aforementioned organic compounds have wide range of end uses in medical, pharmaceutical, oil& gas industry, and among others. This is anticipated to increase the sales of ethane; thus, creating lucrative opportunities for the market. 

The ethane market is segmented on the basis of application, end use, and region. By application, the market is segregated into ethylene synthesis, acetic acid synthesis, and refrigerants. The ethylene synthesis segment dominated the global market in terms of revenue in 2021, with 49% of the total share. This is attributed to the fact that ethylene is one of the most vital petrochemically derived monomers that are used as a feedstock for the further production of various commercial chemicals, such as polyethylene, polymers, fibres, resins, vinyl chloride, and others. Furthermore, data published by the Royal Society of Chemistry stated that 149.7 million tons of ethylene were produced in 2017 globally. This factor is anticipated to increase the overall demand for ethane, thus, fuelling the ethylene synthesis application segment during the forecast period.   

By end use, the market is divided into plastic, food, automotive, and others. The plastic segment dominated the global market in terms of revenue in 2021, with 46% of the total share. The growing population and increase in the use of plastic in daily life have led the plastic packaging sector to witness significant growth where ethane is widely used as an essential ingredient. Furthermore, according to the data published by ISO in March 2022, that plastic production is expected to double by 2040 and increase by 2.5 times by 2050. In addition, government initiative for plastic recycling and reuse leads to growth of the ethane market in upcoming years. 

Region-wise, the ethane market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. The Asia-Pacific ethane market size is projected to grow at the highest CAGR during the forecast period, and accounted for a major ethane market share in 2021, owing to rise in petrochemical, plastic industry, automotive, chemical manufacturing, and other sectors, which have enhanced the performance of the ethane market in the Asia-Pacific region. China's plastic process sector is increasing rapidly, which in turn has enhanced the performance of the ethane market in the region.  

Key players operating in the global ethane market include, Royal Dutch Shell Plc, L'Air Liquide S.A., American Ethane, Aux Sable, DCP Midstream, LLC., Energy Transfer LP, Merck KGaA, Praxair Technology, Inc., Reliance Industries Limited, and WILLIAMS. 

Key findings of the study 

• By application, the ethylene synthesis segment is estimated to display the highest growth rate, in terms of revenue, registering a CAGR of 4.0% from 2022 to 2031. 
• By end use, the plastic end use segment is estimated to display the highest growth rate, in terms of revenue, registering a CAGR of 4.1% from 2022 to 2031. 
• By region, Asia-Pacific garnered the highest share of 44.9% in 2021, in terms of revenue, growing at a CAGR of 4.4%.  

COVID-19 analysis 

The ethane market is negatively impacted due to the wake of the COVID-19 pandemic, owing to its dependence on building & construction, automotive & transportation, food, aerospace, and other sectors. According to a report published by Society of Indian Automobile Manufacturers (SIAM), sales of passenger vehicles, commercial vehicles and two‐wheeler vehicles declined by 51%, 88%, and 40%, respectively in March 2020.  However, increasing demand from the oil & gas and automoive, and transpotation sector has enhanced the performance of ethane market post COVID-19.