C4-C8 Diol Market - Forecast(2023 - 2028)

The Global C4-C8 Diol Market size is forecast to reach US$102 million by 2027, after growing at a CAGR of 3.5% during the forecast period 2022-2027. C4-C8 diols primarily undergo further aldol condensation to offer oligomeric and dimeric derivatives. They can be categorized into a wide range of product types which include 1,4-Butanediol, 1,3-Butanediol, 2,2-Dimethylpropane-1,3-Diol (Neopentyl Glycol), Ethane-1,2-Diol (Ethylene Glycol), 1,5-Pentanediol, 1,6-Hexanediol, and other products. According to recent insights published on Interpack in 2020, the global packaging industry is expected to grow by an annual rate of 3.5% within the next four years. An increase in demand from the packaging and textile industries acts as the major driver for the market. On the other hand, health hazards associated with the use of diols may confine the growth of the market.

C4-C8 Diol Market COVID-19 Impact

There is no doubt that the COVID-19 lockdown has significantly reduced manufacturing, and production activities as a result of the country-wise shutdown of manufacturing sites, shortage of labor, and the decline of the supply and demand chain all over the world, thus, affecting the market. Studies show that the outbreak of COVID-19 sharply declined the production of raw materials in 2020 due to a lack of operations across multiple countries around the world. However, the COVID-19 pandemic has increased the demand for packaging all over the world. For instance, recent insights from Flexible Packaging state that the food packaging industry witnessed a sharp increase in demand during the pandemic due to a high number of consumers turning to online groceries shopping. By the end of 2021, U.S. online grocery sales accounted for 12.4% of the country’s overall e-commerce sales. It further states that the U.S. digital grocery buyers grew up to 137.9 million in 2021, a growth of 4.8% in comparison to 2020. Supermarkets witnessed a huge surge in demand for packaging materials for the wrapping of food and other grocery products. Hence, such an increase in demand for packaging is expected to increase the demand for C4-C8 diols such as 1,5-pentanediol, neopentyl glycol, ethylene glycol, and more as it is primarily used in the production of polyester and polyurethane resins used for packaging. This is expected to lead to market growth in the forecast period.

Report Coverage

The report: “C4-C8 Diol Market Report– Forecast (2022-2027)”, by IndustryARC covers an in-depth analysis of the following segments of the Global C4-C8 Diol Industry.

By Product: 1,4-Butanediol, 1,3-Butanediol, 1,2-Butanediol, 2,3-Butanediol, 2,2-Dimethylpropane-1,3-Diol (Neopentyl Glycol), Ethane-1,2-Diol (Ethylene Glycol), 1,5-Pentanediol, 2,4-Pentanediol, 1,6-Hexanediol, 1,7-Heptanediol, Others.
By Application: Fine Chemicals, Polymers (Polyethylene Terephthalate, Polypropylene Terephthalate, Polybutylene Terephthalate, Polyesters, Polyurethanes, Others), Solvents, Elastic Fibers, Adhesives & Sealants, Others.
By End-Use Industry: Pharmaceutical, Cosmetics, Paints & Coatings, Automotive, Packaging, Textile, Others.
By Geography: North America (USA, Canada, and Mexico), Europe (the UK, Germany, France, Italy, Netherlands, Spain, Russia, Belgium, and the Rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Australia, and New Zealand, Indonesia, Taiwan, Malaysia, and the Rest of Asia-Pacific), South America (Brazil, Argentina, Colombia, Chile and the Rest of South America), the Rest of the World (the Middle East, and Africa).

Key Takeaways

• Adhesives & Sealants application held a significant share in the Global C4-C8 Diol market in 2021. C4-C8 diol is used in the production of polyester and polyurethane resins that offer a range of characteristics, excellent flexibility, and adhesion, which makes it ideal for use in adhesives and sealants.
• Packaging industry held the largest share in the Global C4-C8 Diol market in 2021, owing to the increasing demand for packaging across the world. For instance, recent insights from Interpack states that the global packaging industry is expected to grow by an annual rate of 3.5% from 2020 to 2024.
•  Asia-Pacific dominated the Global C4-C8 Diol Market in 2021, owing to the increasing demand for C4-C8 diol from the packaging sector of the region. According to a recent study published on Interpack, Asia accounted for the highest world share of packaging sales in 2020, an increase of 7.4% in comparison to 2019.

Figure: Asia-Pacific C4-C8 Diol Market Revenue, 2021-2027 (US$ Million)

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C4-C8 Diol Market Segment Analysis – By Application

The adhesives & sealants held a significant share in the Global C4-C8 Diol Market in 2021, owing to the increasing demand for adhesives & sealants from the packaging sectors in multiple regions across the world. According to a recent study published by the European Adhesive and Sealant Industry in 2020, the adhesives & sealants sector saw an increase in its production activities across multiple regions. For instance, Asia-Pacific saw an increase of 36.8%, Europe by 34.5%, North America by 23.1%, the Middle East by 1.3%, and Africa by 1.1% in 2020. In this way, such an increase in the production of adhesives and sealants across the globe is expected to increase the demand for C4-C8 diols such as 1,5-pentanediol, 1,6-hexanediol, neopentyl glycol, and ethylene glycol, since it is primarily used in the production resins used in adhesives and sealants, owing to its excellent flexibility, and adhesion properties. This is expected to drive the growth of the market during the forecast period.

C4-C8 Diol Market Segment Analysis – By End-Use Industry

The packaging industry held the largest share in the Global C4-C8 Diol Market in 2021 and is expected to grow at a CAGR of 3.6% between 2022 and 2027, owing to its increasing demand from the packaging industry. According to PMMI (The Association for Packaging and Processing), the North American beverage industry is expected to increase by 4.5% from 2018 to 2028, with the United States leading the beverage packaging sector. Likewise, recent insights from the Packaging Federation of the United Kingdom state that the UK packaging manufacturing industry reached an annual sales of GBP 11 billion (US$ 15.2 billion) in 2020, owing to the increasing demand for packaging from multiple sectors of the region.

In this way, an increase in demand for packaging is expected to increase the demand for C4-C8 diol since it is mostly used in the manufacturing of polyester, polyurethane, and particularly polyethylene terephthalate (PET) used for packaging. This is expected to boost the growth of the market during the forecast period.

C4-C8 Diol Market Segment Analysis – By Geography

Asia-Pacific held the largest share in the Global C4-C8 Diol Market in 2021 up to 32%. The consumption of C4-C8 diol is particularly high in this region due to its increasing demand from the packaging sector. For instance, China holds the largest market share around the world when it comes to food packaging. According to a recent study published on Interpack, the consumption of food packaging is expected to increase to 447,066 million in 2023. Likewise, it also states that the Chinese packaging companies such as 3D, SIP, and WLCSP alone achieved a revenue of around US$5.88 billion with end packaging.

According to the Packaging Industry Association of India, the Indian packaging industry was valued at around US$ 50.5 billion in 2019 and is expected to increase up to US$ 204.81 billion by the end of 2025. It further states that packaging is considered to be one of the industries with high growth in India and is rising at 22-25% per year. Thus, the surging growth of the packaging sector, owing to its increasing demand in the region is expected to increase the demand for C4-C8 diols such as 1,5-pentanediol, neopentyl glycol, ethylene glycol, as a primary medium for the production of resins required for packaging. This is expected to accelerate the market growth during the forecast period.

C4-C8 Diol Market Drivers

An increase in automobile production is most likely to increase demand for the product

According to a recent study published by the German Association of Automotive Industry during the fourth quarter of 2020, the new registration of motor vehicles reached up to 16,763 units in Europe, 37,467 units in Asia, 3080 units in South America, 17,421 units in North America, 12,733 units in Western Europe, and 5180 units in other regions worldwide. Likewise, a recent study published by the International Netherlands Group (ING) states that the demand for the production and development of electric vehicles has been increasing since the pandemic. It states that the global sales of new electric vehicles have increased by 50% in 2021, and it is expected to increase by 8% in 2022. Furthermore, in 2021, Ford invested US$ 11 billion to develop new electric vehicle facilities in Tennessee and Kentucky in the United States with the aim of increasing its electric vehicle production. In March 2022, Tesla launched its first automobile plant in Germany. The plant is capable of producing 500,000 electric vehicles annually as well as batteries for the cars.

C4-C8 diols are commonly used for the production of adhesives utilized for bonding various components of the automobile assembly which include joining seats, spoilers, bumpers, dashboards, headlights, and other similar components. Furthermore, it is also used in the production of fibers used in automobile seat covers and automobile flooring carpets along with automotive coatings. Hence, an increase in automobile production is expected to increase the demand for C4-C8 diol, leading to the growth of the market in the upcoming years.

An increase in demand from the textile industry is most likely to increase demand for the product

C4-C8 diols are commonly used in the textile industry for manufacturing PET fibers, and elastic fibers, owing to their properties such as high durability, stability, high moisture resistance, and antimicrobial properties. For instance, in July 2021, India announced the Non-Woven Fabric Manufacturing Expansion Project worth INR 220 million (US$ 2.9 million) in Himachal Pradesh. A recent article published on fibre2fashion states that Vietnam’s garment manufacturing business accounts for around 70% of the majority of businesses. It also states that the import of textiles and clothing by the United States increased by 26.79% up to US$ 41.689 billion during the initial five months of 2021. Likewise, the value of U.S. man-made fiber, textile, and clothing shipments reached about US$ 64.4 billion in 2020. Furthermore, in 2021, United Nations Environment Programme (UNEP) announced the commencement of a new project that is targeted to provision the approval of eco-innovation along with the use of Product Environmental Footprint (PEF) within textile SMEs in Kenya, South Africa, and Tunisia.

In this way, an increase in textile operations across the world is expected to increase the demand for C4-C8 diol for the production of textile fibers. This is anticipated to drive the growth of the market in the upcoming years.

C4-C8 Diol Market Challenges

Fluctuating prices of raw materials can cause an obstruction to the market growth

Some of the raw materials for C4-C8 diol are obtained from crude oil and natural gas. In 2020, the international benchmark for petroleum prices across the world also known as Brent crude prices decreased to US$ 9.12 per barrel, which was the lowest record since December 10, 1998. Likewise, in April 2020, India’s Crude Oil Basket (COB) reached US$ 19.90 per barrel, which was the lowest record since February 2002. During the first 11 months of the year 2020-21, the average annual price of India’s COB was around US$ 42.72 per barrel, which decreased by 30% more than the average COB price in 2019-20. Furthermore, as per revised estimates for 2020-21, the COB has increased by around 35% from its initial budget estimate. In this way, the uncertainty regarding the price of crude oil also increases the price of raw materials required for the production of C4-C8 diol. Hence, such instability and fluctuating prices of raw materials may confine the growth of the market.

C4-C8 Diol Industry Outlook

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the Global C4-C8 Diol Market. Global C4-C8 Diol top 10 companies are:

1. Ashland Inc.
2. BASF SE
3. Fushun Tianfu Chemicals Co., Ltd.
4. Invista
5. Saudi International Petrochemical Company
6. SK Global Chemical Co. Ltd.
7. LyondellBasell Chemicals
8. Dairen Chemicals
9. Markor Chemical
10. Zhejiang Boadge Chemical

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