Global butane market is set to hit USD 125.7 billion mark by 2026, growing at a CAGR of 7.3% over the forecast period, according to the latest research available at Market Study Report LLC, report provides extensively data on market share, growth, trends and forecasts for the period 2018-2026.
According to the report, the butane market is mainly driven by the growing utilization and demand for LPG (liquefied petroleum gas) worldwide. The feedstocks for butane are coal and naphtha. This natural gas exhibits properties like high flammability and easy liquification - features that have led to profound use of butane in fuel manufacturing and blending as well as in the production of petrochemicals.
The growing demand for affordable fuel products among consumers, particularly in the developing nations has also boosted the demand for butane lately. Moreover, rapid development in rural regions and surging consumer income have helped promote the product’s awareness and effectively shift consumer’s preference towards the use of LPG cylinders in the residential space, cites the report.
Thanks to its profound benefits, using LPG has significantly reduced the dependency on forest-based products like wood for combustion purposes in rural areas and is now being widely used in many developed nations as a primary fuel for residential applications.
Based on the findings of the report, the favorable regulatory policies and government subsidies have also amplified LPG consumption, thus positively impacting the butane market growth. For instance, in India, the government subsidizes LPG cylinders based on the number of cylinders being used in each household. Additionally, there are a number of schemes introduced for offering accessibility to LPG to the rural consumers. Such factors have collectively contributed to the increased consumption of butane.
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In addition to residential use, butane is also widely used in refinery applications and chemical production. Other applications of butane include industrial heating/drying and engine fuel. It is prudent to mention that U.S., tight oil and shale gas extraction are prevalent in butane production, mainly due to the region’s geographical features and more developed pipeline infrastructure for the transportation of butane.
The prices of butane are highly volatile owing to it being a refinery product subject to the fluctuations in crude oil rates. In terms of geographic landscape, the market is complemented by key producing regions including the U.S. and the Middle East. Whereas Northeast Asia and China currently hold a significant consumers and producers share for natural gas liquids including both propane and butane. Additionally, economic development in emerging Asian countries has further led to significant consumption of butane in end-use sectors such as petrochemical and automobile.
The global butane market comprises of both national and international market players which are primarily dominating the oil & gas sector. The market includes the presence of both private and public players, some of which include Royal Dutch Shell, Exxon Mobil Corp., Total S.A., British Petroleum, China Petroleum and Chemical Corp. (SINOPEC) and China National Petroleum Corp. (CNPC). With swelling demand for petroleum-based products and fuels and increased pressure on the oil and gas sector, the butane market will indeed witness increased growth over the forecast period.