The global naphthenic acid market size is projected to reach USD 67.9 million by 2025 expanding at a CAGR of 2.5% over the forecast period. Rising importance of wood preservatives to protect wooden products from decomposition, decaying, as well as fire, is expected to remain a key growth-driving factor in near future. Rising usage as a fuel additive in jet engines and locomotives, due to increased awareness regarding engine life protection, is also projected boost demand for naphthenic acid.
Countries, such as Vietnam, are concentrating on increasing their wood product manufacturing and export capacity to meet the growing demand across the globe. The Vietnam government is aiming at doubling the wood product exports, to reach USD 18 to USD 20 billion by the end of 2025. Thus, increasing efforts by various countries to increase the manufacturing capacity of wood-derived products will provide new growth avenues for the naphthenic acid market.
The demand for solvent-based wood preservatives is expected to rise in developing countries owing to high penetration and lower cost. Rapidly expanding construction sector in countries, such as China, India, Brazil, and UAE, is expected to provide growth opportunities for the wood preservative market over the forecast period. In Dubai, average spending on wood and timber based product was around USD 2,700 per home in 2017. In the same year, more than 100,000 hotel rooms and service apartments were under construction. Thus, the market for wood preservative is expected to witness high growth in near future.
Naphthenic acid is used as anti-wear agent in jet fuels on account of its high lubricating properties. Rise in global aircraft fleet for commercial as well as defense purposes is expected to augment demand for jet fuel in the forthcoming years, thereby propelling the naphthenic acid market . In 2015, U.S. airlines consumed 16.73 billion gallons of jet fuel and in 2017 this consumption was increased to 17.3 billion gallons.
China is a major contributor, in terms of revenue, to the market followed by U.S. and Germany. Furthermore, high penetration of ink manufacturers along with favorable government policies for investment in manufacturing sector is expected to offer growth opportunities. Moreover, owing to government policies and investments in chemical sector in developing countries, such as India and China, companies are focusing on building strong distribution networks to capture the growing markets.
For instance, Umicore has a strong presence in India with its sales and distribution offices located at strategic places in the country. Companies are also focusing on local distributors to increase their product penetration. The Asia Pacific naphthenic acid industry is highly fragmented in nature owing to the presence top companies and chemical additive manufacturers. The regional demand is expected to grow owing to increasing construction activities. Buyers are focusing on cost-effective products and reliable alternatives to metallurgical upgrades.
High temperature corrosion inhibitors fortified with naphthenic acid offer new alterative to phosphate esters, permitting refiners to consider the use of lower-cost high acid crudes. Thus, the emergence of cost-effective alternative to phosphate ester in industrial coating owing to its excellent anti-scaling properties is expected to provide growth opportunities for the market over the forecast period.
The global market for naphthenic acid is consolidated. Merichem is a leading company and held around 18% of the overall market share followed by Umicore. Umicore is a prominent company in the Europe market and one of the largest suppliers of naphthenic acid to Asia Pacific.
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Hexa Research has segmented the naphthenic acid market report based on product, application and region:-
Segmentation by Product
Segmentation by Application
• Wood Preservatives
• Paints and Ink Drier
• Fuel and Lubricant Additives
Segmentation by Region
• North America
• Asia Pacific
• South Korea
• Rest of the World
Key players analyzed:
• Shenyang Zhangming Chemical Co. Ltd