Feedstock | Jun 2020
India Naphtha Market: Plant Capacity, Production, Operating Efficiency, Technology, Process, Demand & Supply, Type, Application, End Use, Distribution Channel, Region, Competition, Trade, Customer & Price Intelligence Market Analysis, 2015-2030
Naphtha demand in India stood at 20 million tonnes in 2019 and is projected to grow at a CAGR of 6.25% in the forecast period. Government of India’s “Hydrocarbons Vision – 2025” aimed at expanding indigenous production of petroleum products and reducing import bill by 2025 is likely to support the Naphtha market growth in the forecast period.
Based on the product type, there are two main categories of Naphtha – Light Paraffinic Naphtha and Heavy Naphtha. Light Naphtha boils typically between 50⁰F and 160⁰F and is rich in olefins. Hence, it is the most preferred feed for steam crackers for producing a wide range of olefins /polyolefins such as ethylene, propylene etc. However, it strongly competes with Ethane, Propane and Butane (EPB) as feedstocks. Heavy Naphtha which boils between 160⁰F and 370⁰F contains high Naphthenic and aromatic content and is mainly used for production of aromatic products such as Benzene, Toluene, Xylene etc. In addition, Heavy Naphtha is also used in gasoline reforming to increase its octane number.
Naphtha is used as a feedstock to produce a vast variety of petrochemicals such as Ethylene, Propylene, Styrene, Butadiene etc. which find varied applications in industries like rubber, plastics, solvents, and many others. Increasing penetration of Naphtha across several value chains further catalyzed by increasing interest of the state-owned refiners to gain from the synergies between refineries and the petrochemicals is expected to give a tremendous boost to the Naphtha demand during the forecast period. India’s Gasoline blending sector hold the largest market share (around 65%) among several other applications of Naphtha due to increasing demand for high-octane fuel from the transportation and fleet industry. This is followed by the Steam Cracking applications which are expanding exponentially due to rigorous expansion of the domestic refiners with India’s rising focus on “Make in India” policy. Moreover, increasing use of aromatics in the production of edible oils, rubber, and personal care products and rising demand for olefins and polyolefins for producing plastics used in construction, electrical and electronics and packaging industry will further propel market growth in the coming years.
Sudden outbreak of Coronavirus has caused Naphtha to witness an oversupply situation further heightened by trade disruptions due to demand destruction amid nationwide lockdown imposed to contain the spread of the virus. Demand for oil products largely remained hard hit throughout the Q4 FY20 and Q1 FY21, due to lesser fuel consumption while travel restrictions remained despite relaxations in lockdown. India’s total fuel consumption fell almost by 46 per cent causing local refiners like RIL and BPCL to cut their Naphtha cracker run rates by almost 40 per cent or announce temporary shutdowns. Moreover, undue refinery turnaround due to the lockdown also led to substantial fall in India’s Naphtha exports contracting the overall profits of the country’s major exporters. However, with ease in lockdown restrictions fuel demand has up ticked, showing signs of revival as vehicular traffic returned to roads and flights restart. Moreover, major downstream industries which consume Naphtha as feedstock have also resumed procuring greater volumes.
Years Considered for this Report:
Historical Years: 2015 – 2019
Base Year: 2020
Estimated Year: 2021
Forecast Period: 2022 – 2030
Objective of the Study:
• The primary objective of the study was to evaluate and forecast Naphtha capacity, production, demand, inventory, and demand – supply gap in India.
• To categorize Naphtha demand based on application, end use, grade, source, purity, region and sales channel.
• To study trade dynamics and company share in India Naphtha market.
• To identify major customers of Naphtha in India.
• To evaluate and forecast Naphtha pricing by grade in India Naphtha market.
• To identify and profile major companies operating in India Naphtha market.
• To identify major news, deals and expansion plans in India Naphtha market.
Since the current demand of Naphtha in India is much lesser than the produced volumes, India is also among the key Asian Naphtha exporters with annual exports reaching about 7-9 million tons as of FY19. Reliance Industries Limited, Indian oil Corporation Limited, Essar Vadinar, Bharat Petroleum Corporation Limited, Gail (India) Limited, Oil and Natural Gas Corporation Limited, Hindustan Petroleum Corporation Limited, Nayara Energy, Mangalore Refinery Petrochemicals Ltd are the Indian players operating in the Indian Naphtha Market. A number of Indian state-owned oil refiners are making hefty investments to boost their petrochemical activities and are expected to become significant players in the sector. Thyssenkrupp's plant engineering business has been recently awarded an order worth INR 300 Crore by Assam-based Numaligarh Refinery Limited (NRL)for a massive refinery expansion project which is expected to complete by 2024. Thyssenkrupp will provide engineering, procurement and construction management (EPCM) services for various refinery units of a refinery located in Numaligarh in Assam.
Various factors influencing the cost of Naphtha including crude oil availability and demand-supply scenario, refinery margins, existing geopolitics, OPEC-controlled prices etc. Naphtha prices in India fluctuated throughout the fourth quarter of FY20, alongside volatile upstream crude oil futures. Hit by the pandemic woes, Naphtha prices plunged to record breaking lows in FY20 due to the plummeting crude oil and were assessed at USD XXX per MT on bulk contract basis.
To extract data for India Naphtha market, primary research surveys were conducted with Naphtha manufacturers, suppliers, distributors, wholesalers and end users. While interviewing, the respondents were also inquired about their competitors. Through this technique, ChemAnalyst was able to include manufacturers that could not be identified due to the limitations of secondary research. Moreover, ChemAnalyst analyzed various end user segments and projected a positive outlook for India Naphtha market over the coming years.
ChemAnalyst calculated Naphtha demand in India by analyzing the historical data and demand forecast was carried out considering the end use industries growth. ChemAnalyst sourced these values from industry experts and company representatives and externally validated through analyzing historical sales data of respective manufacturers to arrive at the overall market size. Various secondary sources such as company websites, association reports, annual reports, etc., were also studied by ChemAnalyst.
Key Target Audience:
• Naphtha manufacturers and other stakeholders
• Organizations, forums and alliances related to Naphtha distribution
• Government bodies such as regulating authorities and policy makers
• Market research organizations and consulting companies
The study is useful in providing answers to several critical questions that are important for industry stakeholders, such as Naphtha manufacturers, distributors and policy makers. The report also provides useful insights about which market segments should be targeted over the coming years to strategize investments and capitalize on growth opportunities.
In this report, the India Naphtha market has been segmented into following categories, in addition to the industry trends which have also been detailed below:
Market, By Type
Light Naphtha, Heavy Naphtha
Market, by Application
Gasoline Blending, Steam Cracking, Naphtha Reforming, Others
Market, by End Use
Fuel, Petrochemical, Agriculture, Paints and Coatings, Power, Steel and Others
Market, by Sales Channel
Direct/Institutional Sales, Retail Sales, Other Channel Sales
Market, by Region
North, West, East and South
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