Nitrobenzene Market– Statistics And Analysis & Forecast To 2027

Posted by Mrudula Anil Karmarkar on December 30th, 2020

The global nitrobenzene market size is projected to reach USD 14.3 billion by 2027, registering a revenue based CAGR of 5.6% over the forecast period, according to a new report by Grand View Research, Inc. The demand is anticipated to grow significantly owing to rising consumption of nitrobenzene in the production of synthetic rubber.

Demand across the organic chemicals sector shall register a slump in growth albeit increasing demand for certain chemicals that find end applications in healthcare and food. Furthermore, China, a major supplier of chemicals to the world, registered a considerable decline in manufacturing in the first quarter of 2020, following the trajectory unfolded by COVID-19's escalation to a pandemic. This has led to an imbalance in supply-demand dynamics, forcing manufacturers and customers alike to renegotiate supply agreements. The report will account for Covid19 as a key market contributor.

The automotive sector is considered to be the largest end-user of rubber manufactured from nitrobenzene. It is used to produce automotive tires, tubes, covers, belts, mats, steering wheel covers, and other accessories. According to Organisation Internationale des Constructeurs d'Automobiles (OICA), the global vehicle production grew from 90.8 million units in 2015 to 95.6 million units in 2018. Rising automotive sales is also expected to boost its aftermarket, in turn, propelling the demand for synthetic rubber. Consumption of nitrobenzene across the globe is largely affected by fluctuating raw material prices. This is due to the fact that major raw materials used in manufacturing are petrochemical derivatives and are obtained by the synthesis of crude oil. Besides, the prices are largely affected by currency fluctuations, as the global production of the product is concentrated in China.

North America is the third-largest market after Asia Pacific and Europe. The growing demand of aniline for methyl diisocyanate (MDI) in the region is anticipated to drive the nitrobenzene market over the forecast period. Bayer acquired the aniline production facility of DuPont, in Baytown, Texas, in 2014, in order to support the growing demand and strengthen its position in North America. The facility also produces MDI, toluene diisocyanate (TDI), and polycarbonate, thus having a forward integration.

Nitrobenzene Market Report Highlights

  • Aniline production was the dominant application segment in 2020 and is expected to witness a revenue based CAGR of 5.7% from 2020 to 2027
  • Synthetic rubber manufacturing is anticipated to lead the market in China with a revenue-based CAGR of 6.5% from 2020 to 2027 due to its wide usage in the automotive Original Equipment Manufacturer (OEM) and aftermarket sectors
  • Construction and automotive industries are the major end-use markets for nitrobenzene due to high demand for aniline in different applications. These industries consumed 82% of the total nitrobenzene volume globally in 2020
  • The demand for MDI in Europe has led to companies investing in the production of aniline, thus driving the nitrobenzene market in the region with a revenue-based CAGR of 4.6% from 2020 to 2027
  • Nitrobenzene manufacturers are focusing on forward integration in order to strengthen their market position.

BASF expanded the production capacity of its Verbund site in Geismar, Louisiana, in 2016, owring rising demand for MDI in North America. The facility initially produced 300,000 tons of MDI annually and currently has a capacity of 600,000 tons. These factors are anticipated to drive the production of aniline, in turn boosting the demand for nitrobenzene in the region.

Nitrobenzene is an intermediary organic chemical that is pale yellow in color with an almond-like odor. It is insoluble in water and is produced on a commercial scale by the nitration of benzene. The nitration process involves the formation of nitronium ion (NO2+), generated by the reaction between sulfuric acid and nitric acid. However, in order to be used in common high-performance plastics, the chemical is first converted into aniline and then into methylene diphenyl diisocyanate (MDI). More than 85% of the aniline produced worldwide is utilized in the manufacturing of MDI. Thus, nitrobenzene is anticipated to follow the consumption pattern of aniline and MDI.

U.S. dominated the North America market in 2020 due to high demand from the automotive, construction, and electronics sectors. The automotive production in the U.S. grew from 11.2 million units in 2017 to 11.3 million units in 2018. The compound has high usage in automotive manufacturing in the form of Polyurethane (PU) foams manufactured from MDI. MDI based products are used in different sections of the vehicle including windows, front and rear glass panes, paints and coatings.

The nitrobenzene production in the U.S. is largely affected by the stringent norms by the Environmental Protection Agency (EPA). According to the regulatory agency, the chemical is considered to be toxic to human health and environment and is also likely to be carcinogenic, affecting multiple organs on exposure. These factors have resulted in manufacturers shifting their production bases to the developing economies in Asia Pacific and South America, due to comparatively lenient laws.

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The production of aniline and MDI is growing significantly, especially in China, which is driving the demand for nitrobenzene. In May 2014, the BASF-Huntsman Chinese MDI Plant got an approval from the regional government to double its manufacturing capacity of MDI. The demand for MDI in emerging markets such as China, Brazil, Indonesia, Vietnam, Australia, and India is anticipated to be largely driven by the growing construction industry. The construction industry uses polyurethane-based products because of their durability, versatility, corrosion resistance, and great strength-to-weight ratio.

The production of nitrobenzene is concentrated in China, however, the raw material availability is concentrated majorly in the U.S. and Saudi Arabia. The U.S.-China trade war is projected to generate a negative impact on the raw material supply, thus hampering the production cycle of the product.

Grand View Research has segmented the global nitrobenzene market on the basis of application, end use:

Nitrobenzene Application Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

  • Aniline Production
  • Pesticide Additive
  • Synthetic Rubber Manufacturing
  • Paint Solvent
  • Others

Nitrobenzene End-use Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

  • Construction
  • Agriculture
  • Pharmaceutical
  • Automotive
  • Others

About Grand View Research

Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, we offer market intelligence studies ensuring relevant and fact-based research across a range of industries, from technology to chemicals, materials and healthcare.

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Mrudula Anil Karmarkar

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Mrudula Anil Karmarkar
Joined: July 2nd, 2020
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