Nov 21, 2017   SOURCE: BusinessWire

Global Butane Market - Drivers and Forecasts by Technavio

Technavio analysts forecast the global butane market to grow at a CAGR of almost 8% during the forecast period, according to their latest report. The research study covers the present scenario and growth prospects of the global butane market for 2017-2021.

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Technavio has published a new report on the global butane market from 2017-2021. (Graphic: Business ...

Technavio has published a new report on the global butane market from 2017-2021. (Graphic: Business Wire)

Global butane market at a glance

Butane is a hydrocarbon belonging to the alkane family, which has two structural isomers: n-butane (normal butane) or isobutene. It is characterized as a colorless, flammable, and easily liquefiable gas. Strategic alliances such as partnerships and mergers and few market developments very specific to the South African LPG market are the major trends witnessed in the global butane market. Some of these trends might have an adverse effect during the forecast period adding up to the concerns already present in the market.

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Technavio analysts highlight the following three factors that are contributing to the growth of the global butane market:

  • Advantages of LPG as auto fuel over conventional fuels
  • Increasing demand for LPG in APAC
  • Less stringent regulations in North America

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Advantages of LPG as auto fuel over conventional fuels

LPG is cleaner than petrol and diesel as it contains comparatively simple hydrocarbon compounds. In addition, LPG does not contain lead or any other additives and has very little sulfur content. The emissions from LPG-driven vehicles contain lower levels of hydrocarbon compounds, nitrogen oxides, air toxics, sulfur oxides, and particulates than that of petrol and diesel based vehicles.

Ajay Adhikari, a lead industrial gases research analyst at Technavio, says, "LPG-driven vehicles have a comparatively lower maintenance cost than petrol and diesel-driven vehicles. LPG as a gas does not possess the attribute of washing lubricant from the cylinder walls of the engine as done by petrol and diesel. This washing action is detrimental to components that rely on the lubrication system for their proper functioning."

Increasing demand for LPG in APAC

Exporters from the Middle East are strengthening the existing supply deals with major Asian importers as they are facing competition from the US LPG exporters. Increasing number of petrochemical units such as propane dehydrogenation units, alkylation units, mixed alkane dehydrogenation, steam crackers, and isomerization units are using LPG as a feedstock.

"LPG can also be used as a feedstock to produce propylene, MTBE, ethylene, alkylate, and other chemicals. Some of these are used as blending components for producing motor gasoline. Butane is also used as a feedstock for MTBE, alkylate, and aromatization units to produce chemicals and gasoline-blending components that improve the octane rating of gasoline," adds Ajay.

Less stringent regulations in North America

The current regulations prevalent in the US natural gas industry are less stringent and are heavily reliant upon competitive forces. The past two decades have seen dramatic changes throughout the industry as a result of its dynamic regulatory environment. Despite the restructuring and deregulation of some parts of the natural gas supply chain, significant regulatory checks persist in the transportation and distribution sector of natural gas.

Under the present regulatory environment, only pipelines and local distribution companies are directly monitored with respect to the services they provide. Natural gas producers and marketers in North America do not face direct regulations as there is no government agency elected with the direct oversight of their day-to-day business.

Top vendors:

  • BP
  • Chevron Phillips Chemical
  • ConocoPhillips
  • ExxonMobil
  • Total

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