The impact of COVID-19 pandemic can be felt across the chemical industry. The growing inability in the production and manufacturing processes, in the light of the self-quarantined workforce has caused a major disruption in the supply chain across the sector. Restrictions encouraged by this pandemic are obstructing the production of essentials such as life-saving drugs.
The nature of operation in chemical plants that cannot be easily stopped and started, makes the operational restrictions in these plants a serious concern for the industry leaders. Restricted and delayed shipments from China have created a price hike in the raw materials, affecting the core of the chemicals industry.
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The slacking demand from different impacted industries such as automotive is negatively influencing the growth of the chemical industry. In light of the current crisis, the market leaders are focused to become self-reliant which is expected to benefit the economic growth of different economies in the longer term. Companies are triggering events to restructure and recover from the losses incurred during the COVID-19 pandemic.
The need to increase fuel efficiency and capacity is one of the primary concerns of the oil and gas industry. Isomerized gasoline with a high octane number helps oil refineries meet the needs of the gasoline blending sector. C5-C8 normal paraffin is a carbon compound that is produced by oil refineries in the atmospheric distillation unit or ADC and is consumed in order to increase the octane number and capacity of the gasoline. As a result, gasoline blending is the key application of C5-C8 normal paraffin. This product is at present not available readily in the market and producers of C5-C8 normal paraffin are emphasizing on developing their business overseas and collaborating with distributors across the globe. The development of derivative products is another key focus area of manufacturers of C5-C8 normal paraffin.
Growing demand for iso-C5/C6 compounds for gasoline blending is anticipated to drive the market over the course of the forecast period. The surging demand for several chemical intermediates that find applications in chemical, polymer, paints and coatings, and agrochemical industries, among others is expected to augur well for the growth in consumption of C5–C8 normal paraffin.
A report by Persistence Market Research (PMR) states that the global C5-C8 normal paraffin market will witness a CAGR of 3.2% from 2018 to 2026. The market is expected to touch a valuation of US$ 48,736.6 Mn by the end of 2026 from US$ 36,811.1 Mn recorded in 2017.
Stable Rise in Global Vehicle Parc to Trigger Demand for C5-C8 Normal Paraffin
Automotive sales has been gaining traction post the global slowdown. Based on statistics published by Organisation Internationale des Constructeurs d’Automobiles (OICA), automobile production has been growing at a rate of around 3% annually since 2012. Global automobile production stood at 95 million units in 2016, comprising both passenger and commercial vehicles, growing steadily to 97 million units in 2017. Among the vehicle fleet, gasoline vehicles account for a large share in the global market.
This can be attributed to the fact that gasoline with a high octane number provides better fuel efficiency and high reliability and has an anti-knocking property, which increases the performance of the vehicle with complete combustion of fuel. To comply with fuel specifications, especially the octane number range recommended by the governments of developed and developing countries, the demand for high octane gasoline fuel is expected to increase, which in turn will drive the demand for iso C5/C6 compounds. With a significant number of gasoline fueled vehicles plying the roads, the demand for high octane gasoline is expected to increase, which in turn is expected to drive the C5–C6 normal paraffin market over the forecast period.
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