Hexane Market: Key Highlights
- Global demand for hexane has increased considerably over the last few years. This trend is expected to continue during the forecast period owing to the rise in demand for edible oil. Hexane is used as solvent in the extraction of edible oil from seeds and vegetable crops such as soybean, groundnut, corn, palm, and rapeseed. It helps remove unfavorable taste from oil and obtain higher yield.
- India is the second-largest consumer of vegetable oil in the world. The per capita vegetable oil consumption in India has been rising at a rate of ~3% p.a. and is expected to reach up to 15 kilo grams by 2028. Growth in the consumption of vegetable oil is driving oil production in the country.
- In terms of demand, Asia Pacific led the global hexane market in 2018. This trend is anticipated to continue between 2019 and 2027. The oil extraction application segment in Asia Pacific is projected to expand at a CAGR of 4.5% during the forecast period.
- The industrial cleaning & degreasing application segment has been expanding since the last few years, due to the increase in demand for industrial cleaning & degreasing products. Hexane is increasing being used as a solvent in various industries.
- Demand for hexane in China is projected to rise at a CAGR of ~5% between 2019 and 2027. China is a leading manufacturer and consumer of hexane in Asia Pacific, due to the easy availability of raw materials such as crude oil, natural gas, and petroleum at low prices. Demand for oil extraction/food grade hexane is estimated to rise significantly in the country in the near future.
Hexane Market: Key Drivers and Opportunities
- Hexane is largely used for the extraction of edible oils from vegetables and seeds such as mustard seed, cottonseed, rapeseed, flax, groundnut, soybean, corn germ, safflower seed, and palm
- Growth in population, rise in disposable income, and improvement in standard of living are key factors driving the demand for edible oil in developing countries such as China, Brazil, and India. Increase in the number of retail outlets and expansion of the food processing sector are also boosting the demand for edible oil across the globe. This, in turn, is projected to drive the production of edible oil across the world in the near future. Thus, increase in demand for hexane in the oil extraction process is likely to augment the global hexane market during the forecast period.
- Hexane is used as a solvent in paints and coatings for dissolving of pigments, additives, and binders. Solvents control paint viscosity and enhance film quality. Around 50% of solvents are employed in the manufacturing of paints, coatings, and printing inks. Rise in demand for printing inks, paints, and coatings is expected to propel the demand for solvents in the near future. This, in turn, is projected to drive the global hexane market during the forecast period.
- Major players operating in the global hexane market include Royal Dutch Shell plc., Exxon Mobil Corporation, Phillips 66, Sumitomo Chemical Co. Ltd., Rompetrol Rafinare, and Petroleo Brasileiro SA. These companies are expanding their presence in Asia Pacific in order to tap immense opportunities in the region.
Asia Pacific to be Highly Lucrative Region of Hexane Market
- In terms of value, Asia Pacific constituted a major share of more than 49% of the global hexane market in 2018
- Expansion in the edible oil industry and rise in demand for industrial solvents are major factors anticipated to drive the hexane market in Asia Pacific during the forecast period
- Increase in awareness about the environment and implementation of stringent government regulations regarding workplace safety and discharge of industrial effluents are key factors hampering the global hexane market
- The market in Asia Pacific is anticipated to expand at a rapid CAGR during the forecast period. The hexane market in the region is driven by the rise in demand from China, India, and ASEAN, owing to the increase in consumption of edible oil and rapid industrialization in these regions
Hexane Market: Key Developments
- In July 2019, Romania’s Rompetrol Rafinare announced plans to invest US$ 1.9 Mn to upgrade its steam plant in the Vega oil refinery, Ploiesti. The company aims to increase the energy efficiency of the refinery and boost the yield from 91% to 96% through the upgrade. The upgrade includes installation of a new steam boiler.
- In November 2018, BPCL’s Kochi refinery in Kerala, India, started the production of food grade quality hexane (FGQH) with annual capacity of 5,000 tons. The move was intended to cater to domestic customers and become self-sufficient in hexane production. The company also started the production of polymer grade hexane in 2018.
- In 2018, Bharat Petroleum Corporation Ltd signed an agreement with M/s. GTC Technology, U.S., to jointly produce and patent hexane products
- In 2018, Indian Oil Corporation Ltd announced plans to invest around US$ 3.3 Bn to expand its crude oil processing plant to increase the production capacity of its Koyali refinery at Vadodara, India, by 2022. The expansion is expected to improve the energy performance of the refinery. It is also likely to help meet the rising domestic demand for finished products.