The Global Hexane Market is projected to register a CAGR of over 3. 5% during the forecast period (2021-2026). The market was negatively impacted by COVID-19 in 2020. The declining automotive industry along with a temporary hold on automotive manufacturing and construction activities due to the government-imposed lockdown during the pandemic period had created a demand drop for the solvents used in the formulation of adhesives, paints, and coatings, which in turn negatively impacted the demand for the hexane market.
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However, sales for edible oil are recovering fast and are estimated to reach pre-COVID levels in the near future, which will stimulate the demand for edible oil extractants and hexane.
- Over the short term, growing demand of hexane from petrochemical industries for the application like solvents is expected to drive the market’s growth.
- Availability of safer alternatives for oil extraction such as cyclohexane is going to somehow hinder the market growth.
- Asia-Pacific region is expected to dominate the market and is also likely to witness the highest CAGR during the forecast period.
Key Market Trends
Edible Oil Extraction to Dominate the Market
- Hexane is increasingly being used as a solvent to extract edible oils from seed and vegetable crops, e.g., peanuts, soybeans, corn, etc.
- Hexane has a greater ability to extract oil, compared to other solvents, like petroleum ether and ethyl acetate. It easily mixes with vegetable oil and washes it out without disturbing fiber, protein, sugar, and undesired gums.
- Growth in the edible oil segment can be attributed to the rising awareness among consumers about the use of refined oil and the impact it has on health.
- Global production volume of vegetable oil was accounted for about 207.33 million tons in FY 2019 and increased to 209.58 million tons in FY 2020, with a growth rate of about 1%, thereby stimulating the hexane market demand.
- According to the United States Department of Agriculture, the consumption of edible oils like soybean oil, in 2019, in the United States, was 10,659 metric ton and canola oil was 2,465 metric ton, and is increasing year-on-year. Moreover, according to the Department for Promotion of Industry & Internal Trade, in India, the investment value in the vegetable oil sector, in 2019, was around INR 18 billion, which has enhanced the consumption of hexane.
- Additionally, the consumers are inclined to pay higher prices for healthy food products, owing to the increasing food-based health challenges, such as high cholesterol, obesity, etc.
- The growing popularity of edible oils with added health benefits in many countries is shaping the purchase decisions of edible oils, which are high in omega 3, vitamins, oryzanol, natural antioxidants, and others. Thus, exhibiting the likely demand for edible oils in the forthcoming years.
Asia-Pacific Region to Dominate the Market
- Asia-Pacific is expected to dominate the hexane market during the forecast period. Hexane is used as a solvent for glues, varnishes, and inks, it is also used to extract oil and grease contaminants from soil and water, for analysis in laboratories.
- The Chinese production volume of vegetable oil accounted for about 27.64 million tons in FY 2019 and increased to 28.86 million tons in FY 2020, with a growth rate of about 4.4%, thus creating demand for the extracting solvent used in the production of vegetable oil, thus enhancing the market demand for hexane in the country.
- The rapid growth of the food and beverage sector, to meet the demand from the growing population, and the demand for industrial-grade hexane from countries, such as India, China, and Indonesia, are the major components boosting the development of the hexane market in the Asia-Pacific region.
- In 2020, the food and beverages industry was valued at about USD 152.44 billion in China and is estimated to reach USD 230.96 billion by 2024, with a CAGR of about 11% , which will create demand for the food grade hexane in the coming years.
- Owing to the rapid urbanization in the region, the demand for various applications of hexane, such as a cleaning agent in the textile, furniture, and printing industries, is expected to grow during the forecast period.
- India is the world’s second-largest exporter of textiles and apparel, with a massive raw material and manufacturing base. Despite its size, the Indian textile industry has struggled in the global market. In recent years, India’s share in global textile exports has declined, while countries, like Bangladesh and Vietnam, have been expanding their market shares. However, on the overall scenario, the textile production in the country looks very positive, powered by the burgeoning domestic consumption.
- Additionally, the market for hexane is anticipated to witness growth on account of the growing textile industry. For instance, the size of the Indian textile market is expected to reach USD 223 billion by 2021. The new textile policy aims to achieve USD 300 billion worth of textile exports by 2024-25.
- Therefore, the aforementioned factors are expected to show significant impact on the market in the coming years.
The hexane market is partially consolidated in nature, with a few major players dominating a significant portion of the market. Some of the major companies are Exxon Mobil Corporation, Bharat Petroleum Corporation Limited, Merck KGaA, Royal Dutch Shell Plc, and Sumitomo Chemical Co., Ltd., among others.
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