The propylene oxide market is projected to grow from USD 13.43 Billion in 2017 to USD 17.53 Billion by 2022, at a CAGR of 5.5% from 2017 to 2022. The global propylene oxide market is majorly driven by the rising demand for polyurethanes in various end-use industries, such as automotive, packaging, furniture, footwear, and construction. Increasing usage of polyurethanes in thermal insulators, sealants and flooring materials is also expected to propel the market growth in the coming years.
By application, the polyether polyol segment led the propylene oxide market in 2016. This segment is also projected to grow at the highest CAGR from 2017 to 2022. The growth of this segment can be attributed to increasing demand for polyurethane foams from various end-use industries, such as automotive, building & construction, textile & furnishing, and packaging. Polyether polyols are majorly used in polyurethane foams. Flexible foams are primarily used in cushioning applications such as furniture, bedding, and car seats, and in carpet underlay. Rigid foam is highly used in the construction industry where it is mostly used for insulation. Rigid foam is also used in commercial refrigeration and packaging.
By production process, the propylene oxide market has been segmented into chlorohydrin process, cumene-based process, TBA process, styrene monomer process, hydrogen peroxide process. The chlorohydrin process led the propylene oxide market in 2016. The hydrogen peroxide process segment of the market is projected to grow at the highest CAGR during the forecast period.
The Asia Pacific region is estimated to be the largest market for propylene oxide in 2017. The growth of this market can be attributed to the rising demand for propylene oxide from the end-use industries, such as automotive, building & construction, textile & furnishing, chemical & pharmaceutical, and packaging. Asia Pacific is the fastest-growing market for propylene oxide, due to its growing demand in China, Japan, and India.
The factors inhibiting the growth of the propylene oxide market is the price volatility of the raw material. The major raw material for the production of propylene oxide is propylene, which is manufactured from crude oil. Any change in the cost of these basic raw materials directly impacts the production chain to final propylene oxide. Most of these raw materials are petroleum products and are vulnerable to the fluctuations in commodity prices.