Global Acetylene Market Demand & Forecast Analysis, 2016-2036

Acetylene is a flammable, colourless gas widely used as an intermediate in chemical manufacturing and as fuel for cutting and welding in metal working industries. It is generally produced by partial combustion of methane or as a side product in ethylene stream from cracking of hydrocarbons. Acetylene is industrially produced primarily by two processes. Carbide process and partial oxidation process. Chinese manufacturers primarily use carbide process for Acetylene production. Acetylene is also obtained as by product in ethylene production. Vinyl chloride monomer, vinyl acetate monomer, 1,4-butanediol are the major three chemicals accounting for around 90% of total acetylene consumption. Several greenhouse gases are emitted during the production of acetylene gas which restraints the market growth due to environmental hazards associated with acetylene gas. China is the largest player in the acetylene market accounting for more than 90% of total acetylene production owing to abundant coal reserves which has led to large scale production of chemicals from coal via acetylene. Europe, United States and Japan account for the remainder of acetylene market. 

The global demand for Acetylene was estimated to be more than 7,400 kilo tons in 2016 and it has continued to grow at an average annual rate of 2% over the last five years, mainly supported by the strong demand from Acetylene from VCM, 1,4 Butanediol and VAM applications. Due to the outbreak of COVID-19, the Acetylene market was negatively impacted. The lockdowns and restrictions imposed in various countries across the world, to curb the spread of the virus had a negative impact on the building & construction, transportation and electrical & electronics, which are the major end-users of Acetylene. This resulted in a decrease in the demand for Acetylene based products, leading to a slowdown in the market growth in 2020. While the COVID-19 pandemic has had a negative impact on the Acetylene market, the long-term forecast remains positive as the demand for VCM, VAM and 1,4-Butanediol is expected to continue to grow in the future, particularly in Asia Pacific region, and the industry is likely to recover as the pandemic subsides. The global Acetylene market is estimated to grow from USD 6.5 billion in 2021 to USD 13.7 billion by 2032, at a CAGR of 7% during the long term forecast period.

Global Acetylene Demand Analysis, By Application - 2021 (Kilo Tons)

In terms of Acetylene demand by region, Asia Pacific region dominates the global Acetylene market accounting for a whooping share of more than 95%. The Asia Pacific region is forecast to grow at a CAGR of 5% on the  back of strong growth  of Acetylene in end use industries such as building & construction, automotive and electrical & electronics. Asia will see the strongest level of demand growth pushed by growth in China. Chinese consumption of Acetylene has been increasing, mainly because of increasing demand from its end-use industries. In terms of end-use sector, the building & construction sector in the country is expected to be witness strong growth during forecast period.

The growth opportunities for Acetylene industry are primarily linked with the industry’s drive for its increasing applications in Vinyl Chloride Monomer (VCM), Vinyl Acetate Monomer (VAM), 1,4-Butanediol and other applications. Continuously increasing demand for Acetylene from Vinyl Chloride Monomer (VCM) applications is expected bolster the growth in the demand for Acetylene globally. The VCM application dominates the global Acetylene market, followed by 1,4-BDO application at 9% and VAM application at 7% in 2021. The acetylene is used in manufacturing of VCM which is further used in manufacturing of Poly vinyl chloride (PVC). Asia is a largest producer and consumer of VCM in the world, mainly using VCM to produce PVC. More than 99% of VCM produced around the world is used in the production of PVC. PVC is the third most widely used polymer in the world, after Polyethylene (PE) and Polypropylene (PP). The Vinyl Chloride Monomer (VCM) is produced by ethylene around the world, while China is producing VCM based on acetylene owing to lack of ethylene supply and oil resources in the county and abundance supply of coal and limestone. In China more than 75% of the VCM producing companies use acetylene as the feedstock while the remaining companies use ethylene. The global PVC demand growth is estimated to range between 3%-3.5% in the long-term forecast to 2032 with Asia dominating the demand growth.

China is one of the largest producer and consumer of PVC resins in the world accounting for more than 40% of the global consumption in 2021. The country has witnessed on an annual average of 500 kilo tons of capacity addition in the last five years, which is further projected to remain same in the forecast period owing to the strong demand of PVC resins and PVC products from the end use industries. The construction sector dominates the downstream industries for the PVC. Since the building & construction dominates the PVC market, the demand of PVC industry is closely aligned with the economic development and GDP of the country.

Global Acetylene Demand Analysis, By Application - 2016 - 2032(Kilo Tons)

China is the largest construction market in the world. The sector has maintained a continuous growth at about 5% annually in last five years. Recently, China unveiled a14th Five-Year Plan period (2021-2025) to push the construction sector onto greener, smarter, and safe path. The government is promoting the digital technology such as Internet of Things and big data for the construction sector. According to Ministry of Housing and Urban-Rural Development China, the construction industry is expected to maintain 6% share of country s GDP into 2025.

A wide range of end use applications particularly in automotive, electrical & electronics, and other applications is expected to drive global acetylene demand. Acetylene is used in manufacturing of polychloroprene elastomers, acetylene-based conductive additives, and carbon black. The US based specialty chemical company- Orion Engineered Carbons has announced increase the production capacity of acetylene-based conductive additives to 12 kilo tons at La Porte, Texas which is expected to be operational by second half of 2024. The company turns the acetylene gas into powder, which is added to lithium -ion batteries owing to the excellent properties such as high purity and electric/thermal conductivity. The acetylene-based conductive additives also play an important role in high voltage cables used in solar and wind farms.