Tetrahydrofuran Market - Forecast(2023 - 2028)

Tetrahydrofuran market size is forecast to reach $2.4 billion by 2025, after growing at a CAGR of 7.5% during 2020-2025. The tetrahydrofuran market is witnessing an increase in its demand as it is widely used in manufacturing plastic products, polyurethane coatings, and rubber products. Tetrahydrofuran is being widely used as a solvent for small-scale laboratory experiments, mainly because it can dissolve a wide variety of organic compounds and has a relatively low boiling point. These characteristics of tetrahydrofuran are driving its demand in various end-use industries such as pharmaceutical, food packaging, plastic industry, and more, which will increase the tetrahydrofuran market substantially.

The report: “Tetrahydrofuran Market – Forecast (2020-2025)”, by IndustryARC, covers an in-depth analysis of the following segments of the tetrahydrofuran industry. 

By Process: Reppe Process, Furfural Process, Butadiene Chlorination Process, Propylene Oxide Process, Maleic Anhydride Hydrogenation, Dehydration of 1,4-butanediol, and Others

By Application: Polytetramethylene Ether Glycol (PTMEG), Polyurethane Elastomers, Elastic Polymers, Solvents, and Others

By End-Use Industry: Pharmaceutical, Sealants & Adhesives, Packaging Industry, and Others

By Geography: North-America, South-America, Europe, Asia Pacific, and RoW

The reppe process segment held the largest share in the tetrahydrofuran market in 2019, owing to the high production efficiency, safety associated, and low investments required to carry out the process. Tetrahydrofuran was traditionally produced using the Furfural process where furfural, extracted from corn husks, was used as the raw material in production. However, the drawback of this system was that supply depended on the agricultural environment and, could not, therefore, be relied upon, thus a move was made to the fully synthetic reppe process. The reppe process is preferred over the other processes as the former is completely synthetic, and thus unlike its counterpart, the availability of raw materials is not dependent on agricultural conditions. Its suitability for the mass production of tetrahydrofuran in a fewer number of steps is estimated to lead the rapid utilization of the reppe process in the derivation of tetrahydrofuran during the forecast period.

The polytetramethylene ether glycol (PTMEG) segment held the largest share in the tetrahydrofuran market in 2019, owing to the extensive use of tetrahydrofuran in the production of spandex and polyurethane. Polyurethane elastomer is widely used in the manufacturing of auto –material seat covers and gear shift knobs. And spandex is widely used in sportswear, trendy garments, casual wear, and in various types of women’s clothing such as leggings, form-fit garments, swimwear, athletic wear, and aerobic garments. In addition, the growing health awareness among the public has led to an increase in the number of sports events and fitness activities across the world, thereby leading to increased demand for sportswear. Thus, the extensive use of tetrahydrofuran for polytetramethylene ether glycol (PTMEG) manufacturing is anticipated to drive the tetrahydrofuran market in the forecast period.

The packaging industry held the largest share in the tetrahydrofuran market in 2019 and is growing at a CAGR of 7.8%, owing to the increasing usage of tetrahydrofuran as an industrial solvent for polyvinyl chloride and increasing demand for polyvinyl chloride in the packaging sector. The demand for PVC is increasing in the packaging industry because it is durable, dependable, and lightweight. Flexible PVC helps packaging do its job to maintain the integrity of the products inside, including medicines and it has excellent barrier properties for the preservation of food. Tetrahydrofuran is extensively also used for the production of PVC adhesives as well as for the fabrication of PVC pipe systems that are used in industrial processes in heating and cooling systems. And since tetrahydrofuran is the solvent of choice in making polyvinyl chloride (PVC), with the increasing demand for polyvinyl chloride the demand for tetrahydrofuran is also substantially increasing. All these factors are anticipated to drive the tetrahydrofuran market during the forecast period.

Asia Pacific held the largest share in the tetrahydrofuran market in 2019 up to 30%, owing to the increasing food packaging and pharmaceutical industry in the APAC region. There is an increasing demand for tetrahydrofuran from the packaging industries to manufacture polyvinyl chloride and from the pharmaceutical industry to manufacture pharmaceutical steroids. In 2016, according to the Federation of Indian Chambers of Commerce & Industry (FICCI), the Indian packaging is one of the fastest-growing industries and stands at USD 700 billion globally. In 2017, China’s packaging materials revenue was forecast to exceed $5.2 billion in 2018, which accounted for about 26 percent of the global packaging materials market. According to the International Trade Administration (ITA), Russia is the eighth largest market for packaged food products with 27.5 million tons of trade volume, as well as beverages with a trading volume of 26 billion liters. According to the Indian Brand Equity Foundation (IBEF), India is the largest provider of generic drugs globally. Indian pharmaceutical industry supplies more than 50 % of global demand for various vaccines, 40% of US generic demand, and 25% of all medicines in the UK. And the Indian pharmaceutical sector is expected to grow to US$ 100 billion and the medical device market is expected to grow US$ 25 billion by 2025. Thus, with the increasing packaging and pharmaceutical sector in the region, the demand for tetrahydrofuran will also substantially increase, which will further drive the tetrahydrofuran market growth in the Asia Pacific during the forecast period. 

For decades, chemicals have been attracting the interest of various end-use industries, globally. The growing use of tetrahydrofuran as a solvent for polyvinyl chlorides, vinylidene chloride polymers, and natural and synthetic resins created lucrative opportunities for the manufacturers of tetrahydrofuran. Tetrahydrofuran is used as an intermediate in chemical synthesis. For example, it is used in the preparation of chemicals, including adipic acid, butadiene, acrylic O 2-2 acid, butyrolactone, succinic acid, 1,4-butanediol diacetate, motor fuels, vitamins, hormones, pharmaceuticals, synthetic perfumes, organometallic compounds, and insecticides. It is also used in the manufacture of polytetramethylene ether glycol, polyurethane elastomers, and elastic polymers. In the pharmaceutical industry, it is extensively used for the synthesis of carbetapentane, rifamycin, progesterone, and some hormone drugs. The demand for tetrahydrofuran is constantly increasing as they have huge applications in various end-use industries such as the pharmaceutical and packaging sector, which acts as a driver for the tetrahydrofuran market. 

The tetrahydrofuran market growth is spurred by the rapid expansion of the pharmaceutical industry mainly due to the growing population, urbanization, increasing disposable income, and increasing demand for pharmaceuticals across the region. Tetrahydrofuran is used to manufacture pharmaceutical steroids. Pharmaceutical steroids are used as a reaction medium, primarily in the pharmaceutical industry, in processes such as Grignard syntheses or lithium aluminum hydride reductions. According to the European Federation of Pharmaceutical Industries and Associations (EFPIA), during the period 2014-2018 the Brazilian, Chinese and Indian markets grew by 11.4%, 7.3%, and 11.2% respectively compared to the average market growth of 5.0% for the top 5 European Union markets and 7.8% for the US market. In 2018, the Australian Government announced to drive a new era of better health care in Australia it will invest $1.3 billion in the Health and Medical Industry Growth Plan. With the increasing pharmaceutical industries, the world demand for pharmaceutical steroids will also increase, which acts as a driver for the tetrahydrofuran market during the forecast period. 

Tetrahydrofuran is flammable and carcinogenic. Exposure to tetrahydrofuran can cause acute health hazards to humans as well as animals. THF is highly flammable and upon thermal decomposition releases harmful gases such as carbon monoxide and carbon dioxide. Under certain conditions, such as prolonged storage in contact with air, it can decompose into explosive peroxides. Overexposure may cause dizziness, headache, and irritation to the respiratory tract. The chemical is highly volatile and flammable, so care must be taken that it is stored and handled in an environment where atmospheric oxygen is excluded or limited. Also due to its volatile nature, care must be taken that the contents are used quickly once the container is opened, as it is said to have limited shelf life post-exposure to the environment. All these factors may act as a restrain for the tetrahydrofuran market growth.

The COVID-19 pandemic outbreak has impacted the imports and exports of tetrahydrofuran globally. Governments of various countries have imposed export restrictions on commodities which are significantly disrupting the supplies. Also, the tetrahydrofuran manufacturers are facing issues such as delays in receiving raw materials, which is further resulting in delayed shipments to the customer. In addition, the quality of some raw materials has declined considerably, and the shipments' orders are being heavily affected due to the non-availability of vessels and blank sailing, which is heavily affecting the tetrahydrofuran market growth. 

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the tetrahydrofuran market. In 2019, the market of tetrahydrofuran has been consolidated by the top five players accounting for xx% of the share. Major players in the tetrahydrofuran market are BASF SE, Dairen Chemical, Ashland, INVISTA, Mitsubishi Chemical, LyondellBasell, Sipchem, Penn A Kem, Nova Molecular Technologies, and BioAmber.