Global Butane Market – Drivers and Forecasts by Technavio

November 21, 2017

LONDON–(BUSINESS WIRE)–#IndustrialGases—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.

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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