10 November 2020: The propane market is expected to witness substantial growth due to rising demand in automobile and petrochemical industry. Propane is a flammable hydrocarbon that is liquefied through extensively used pressurization techniques and used in cooking, heating rooms, food, and also as a fuel in vehicles. It is also used for aerosol propellants, refrigerants, and petrochemical feedstock.
Propane is separated from petroleum refining and unprocessed natural gas using refrigeration. It can also be produced from heating crude oil using a distillation tower. Propane can be compressed and stored as liquid in various vessels such as BBQ gas bottles, large gas cylinders, and LPG storage tanks.
Demand in Industrial Sector to Boost Propane Growth
Based on end use, the product can be segmented into industrial, commercial, residential, transportation, and agriculture. Industrial segment emerged as a leading end-use segment in 2016 and is expected to maintain its dominance over the forecast period due to increasing industrial applications.
Clean burning characteristics of propane gas make it ideal in applications such as preheating, cutting and brazing, soldering, heat treatment, and shrink wrapping. In petrochemical industry, it is used to calibrate process control analyzers in mixtures.
Various other applications of the product include testing of engines and gas burners, atmospheres in metallurgy, calibration of gas mixtures, and production of different chemicals. The commercial end use segment is the second largest segment in terms of revenue owing to high consumption of food in restaurants and hotels.
Market Insights
Propane is used as an intermediate product in the production of propylene and ethylene. Rising demand for higher efficiency fuels in automotive industry and applications in other industries are responsible for driving the growth of the market. The product is also used widely in agriculture, commercial, and residential sectors that has led to various regulations and actions concerning safety. For being highly competitive, application development and customized end-uses are expected to be the key parameters.
In order to gain market share major leading companies are resorting to various strategies such as mergers, acquisitions, and capacity expansions in an attempt to diversify the end-use portfolio. The propane market is highly competitive in nature and some of the leading key players in the market are BP, ExxonMobil, Chevron Corp., Total SA, Royal Dutch Shell, and Sinopec.
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