GLOBAL 1,3 PROPANEDIOL MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Market Challenges And Opportunities

Global 1,3 Propanediol Market Drivers:

• Increasing use in polytrimethylene terephthalate(PTT) production: The use of 1,3 propanediol is rapidly expanding as it is the key raw material that is used in the production of polytrimethylene terephthalate which is commonly known as PTT. PTT is a synthetic polyester which exhibits properties similar to nylon such as high strength, elasticity, and resistance to degradation by microorganisms. These properties have made PTT popular for manufacturing textiles, carpeting, upholstery and medical fabrics. Unlike nylon, PTT is moisture-wicking which makes it suitable for outdoor and sportswear. Leading brands are increasingly incorporating PTT fabric in their athletic and casual wear due to its soft texture and moisture management abilities. The demand for PTT has been growing at an impressive rate over the past few years as consumers are looking for high-performance fabrics for outdoor and athletic activities. The moisture transportation and quick-drying features of PTT fabric meet the evolving needs of active consumers. Several apparel manufacturers have expanded their PTT capacity which in turn is augmenting the consumption of 1,3 propanediol that acts as building block for producing PTT polymer. The favorable properties coupled with improving production technologies which are supporting the widening scope of PTT applications beyond textiles into areas such as filaments and films. This widespread utilization of PTT resin across diverse industries is driving significant volume growth for 1,3 propanediol in the near future. For example, Brazil is one of the leading producers of sugarcane-derived 1,3 propanediol. The Brazil country accounted for over 30% of global bio-1,3 propanediol production in 2021 according to the National Confederation of Agriculture.
• Expanding use in polyurethanes synthesis: 1,3 propanediol is finding increasing usage as an important intermediate in manufacturing polyurethanes on an industrial scale. Polyurethanes have diverse applications ranging from foam insulation to adhesives & sealants to coatings & artificial leathers. When 1,3 propanediol is used to synthesize polyurethanes, it offers producers the flexibility to cater to varied performance characteristics depending on the specific end use. For instance, polyurethane flexible foams when manufactured by using 1,3 propanediol as a raw material exhibit superior structural integrity, longevity, and compression set resistance. These high-quality flexible foams find wide applicability in bedding, furniture, automotive interiors and more. Besides flexible foams, 1,3 propanediol derived polyurethanes are also suitable for producing rigid foams, thermoplastic elastomers, adhesives, and synthetic leather. Their versatile properties and competitive production economics as compared to petrochemical-based routes are spurring the replacement of conventional polyol sources with bio-based 1,3 propanediol. The eco-friendly credentials and compliance with stringent regulatory standards make 1,3 propanediol an attractive proposition for the constantly evolving polyurethane industry. As polyurethane consumption continues to grow across major regional markets, the incorporation of bio-1,3 propanediol ensures simultaneous growth of the target market in the near future. For instance, according to data provided by the International Energy Agency's  report, in 2020, the global plastic demand is projected to double by 2050 with polyurethanes accounting for over 20% of total plastic production.

Global 1,3 Propanediol Market Opportunities:

• Growth of Polyethylene Terephthalate (PET) substitutes demand: The demand for PET substitutes has been growing steadily in recent years due to rising environmental concerns and sustainability efforts of manufacturers. PET plastic is non-biodegradable in nature and takes hundreds of years to decompose. This has raised questions on its long term impact. 1,3 propanediol is a building block used to produce polytrimethylene terephthalate (PTT), which is a viable biodegradable alternative to PET in production oftextiles, containers and bottles. PTT breaks down quicker in municipal waste streams as compared to conventional plastics. For instances, according to statistics by United Nations Environment Program, around 11 Mn metric tonnes of plastic ends up in oceans annually, wreaking havoc on marine life and ecosystem. This has prompted governments worldwide to impose restrictions on single-use plastic items.
• Investments in research and development (R&D) activities: Investing in research and development is key for companies in the 1,3 propanediol market to gain a competitive advantage and drive future growth. 1,3 propanediol is primarily used to manufacture polytrimethylene terephthalate (PTT), which is a lightweight synthetic fibre that is stronger and softer than conventional polyester. As demand for sustainable and eco-friendly fibres grows, significant R&D efforts are being made to improve the production process for 1,3 propanediol to make it less resource-intensive and have a lower environmental impact. Companies that successfully develop more sustainable production technologies through R&D will be well-positioned to capitalize on the increasing preferences of textile brands and consumers for greener materials. For instance, research is ongoing to evaluate 1,3 Propanediol's potential as a platform chemical in producing biodegradable plastics, solvents, and cosmetic ingredients. As evidenced by the European Commission, global R&D expenditure on green chemicals is projected to grow over 6% annually between  2020-2023.

• Increasing use in polytrimethylene terephthalate(PTT) production
• Expanding use in polyurethanes synthesis

• Volatility in raw material prices
• Competition from substitute products

Global 1,3 Propanediol Market Restraints:               

• Volatility in raw material prices:  Volatility in raw material prices is presenting a considerable challenge for the 1,3 propanediol market. 1,3 propanediol is typically derived from corn or sugarcane, and fluctuations in agricultural commodity costs directly impact its production costs. In the past year (2020), corn and sugarcane prices have swung dramatically due to various market forces like weather conditions, energy costs, trade policies, and supply chain disruptions from the ongoing pandemic. Such instability in key feedstock pricing makes it difficult for 1,3 propanediol manufacturers to set stable product rates. When input prices rise sharply, companies may be forced to temporarily raise prices or halt production if customers resist rate hikes. This undermines confidence in the reliability of supply. Alternatively, unanticipated feedstock price drops squeeze manufacturer margins if rates cannot be adjusted quickly enough. The unpredictability hangs over long-term market forecasts and planning. It discourages new capacity additions as well as research and development for product improvements. Input price volatility also disproportionately impacts smaller-scale producers. Major industry players have more flexibility to negotiate long-term supply contracts or hedge commodity risks, but smaller companies lack these options. For instances, according to the U.S. Department of Agriculture, corn prices shifted by 30% between 2020 and 2021 alone. This degree of fluctuation makes it difficult even for mid-sized 1,3 propanediol producers to maintain consistent profitability and market share.
• Competition from substitute products: The 1,3 propanediol market is facing significant restraint from substitute products available in the market. 1,3 propanediol is mainly used in the production of polytrimethylene terephthalate (PTT) which is a substitute for polyester and nylon. However, polyester and nylon have been used in the textile and fiber industry for a very long time and have established strong product loyalty among manufacturers as well as consumers. Any new substitute product usually finds it difficult to gain widespread acceptance against entrenched incumbents. Polyester and nylon have reliable supplier networks and proven production processes that allow for mass manufacturing. Setting up new supply chains and production facilities for PTT requires large investments and comes with technology risks that traditional polyester and nylon manufacturers are hesitant to accept. This provides a competitive advantage to polyester and nylon in cost of production as well as reliability of supply. For instances, according to data provided by the   Fiber Year in 2020, global production of polyester was at over 100 Mn metric tons while nylon production was at over 11 Mn metric tons. The huge scale of existing polyester and nylon industries makes PTT a relatively niche substitute product.
• Counterbalance: The key market players in the 1,3 propanediol market needs to keep on innovating so as to be in the competition with other substitute products in the market.