Acetone Market - Forecasts from 2024 to 2029

Acetone Market - Forecasts from 2024 to 2029

The global acetone market is anticipated to register a compound annual growth rate (CAGR) of 4.85% during the projection period (2024 and 2029).

Acetone, which is also known as propanone is a type of liquid that is colorless in nature. It is generally considered safe as it exists in minimum quantities, has low toxicity, and is naturally inflammable. This chemical dissolves very well in water and tends to dry up very quickly, making it useful in homes and industries. Some common uses of acetone are as paint thinner, automobile or furniture varnish, deglaze or degrease of textile products, and in plastics production. Moreover, the US Food and Drug Administration has decided that acetone is safe to use as an indirect additive in adhesives and food-contact coatings. Several governmental and research bodies have looked into the impacts of acetone under the REACH program of the European Chemicals Agency, the WHO International Program on Chemical Safety, and the EPA’s Integrated Risk and Information System Assessment program.

GLOBAL ACETONE MARKET DRIVERS:

Product innovation and development in the acetone market drive growth by offering new applications while enhancing existing ones. Product developments such as the environmentally friendly production of acetone use higher purity grades to meet changing environmental demands and customer needs. LG Chem, for instance, announced in July 2022 that it is starting to ship its first bio-balanced phenol and acetone. It is a product that has achieved the International Sustainability & Carbon Certification PLUS (ISCC PLUS), an eco-friendly material sustainability certificate widely recognized worldwide using renewable bio-feedstock like biomass or waste frying oil.

In formulations and derivations, the versatility of acetone products expands its utilization in industries like medicals, electronics, and automotive coatings. Additionally, changes in the more specialized and specific sub-segments, for example, advances in acetone in forming high-performance adhesives or solvents for specific industries, open up new avenues for consumption and market potential. This leads to total consumption across different uses while enhancing the performance of acetone, thus expanding the market.
Acetone is a solvent used in paints and coatings. It dissolves other components, such as resins and pigments, in paints to provide a smooth flow for easy application on the surface and to increase the rate of drying of the paint's surface. It evaporates faster than other solvents, which is good for obtaining a level surface.

With the growth in building construction around the globe, the acetone market is being utilized immensely. According to new residential construction figures released by the United States Census Bureau and the United States Department of Housing and Urban Development in April 2024, the number of building permits was 1,440,000, while housing completions were 1,623,000.

In building and construction, acetone as a solvent for paints and coatings offers value addition, especially in processes related to the development of painting surfaces. This enhances the architectural beauty of buildings, bridges, and other infrastructure developments. For instance, the secretariat of infrastructure in the planning commission is engaged in practicing the formation of world-class infrastructure in India by implementing multiple policies. These policies focus on bridges, dams, power, roads, and urban infrastructure development.
Acetone is largely utilized in the automobile industry as a solvent in paints and varnishes to improve durability and surface quality. Still, it also serves in the manufacturing of polycarbonate plastics for different vehicle components due to its efficient polymer mixing abilities. Furthermore, with the growth in the automobile industry, the acetone market is anticipated to be positively impacted. As per the PIB (Press Information Bureau), two-wheelers, motors, and passenger automobiles took the major market shares for FY 2021-22. The market share was 77% of two-wheeler motors and 18% of passenger automobiles. A significantly large percentage of the passenger automobile divisions can be classified as small and medium. Similarly, the export of autos increased to 5,617,246 in 2021-22 from 4,134,047 in 2020-21.

Alongside this, due to their mechanical strength, durability, and other features such as chemical resistance, excellent adhesion, and low CO2 emissions, the new VESTA eCO grades offered by Evonik are expected to be used as a sustainable component in paint, lacquer, and binder materials for modern coating systems. They may also be used in high-performance composite materials such as wind turbine rotor blades or vehicle interiors to manufacture higher quality instrument panels and trims, as well as in the most recent chemical synthesis methods.

GLOBAL ACETONE MARKET SEGMENT ANALYSIS:

By end-user, electronics and electrical are among the most popular segments.

In the electronics and electrical industry, acetone is used to clean circuit boards and electronic components to remove flux and other substances on the surface. It is also used to create special types of adhesive and coatings necessary for electronic assembly, which provides maximum performance and durability in use. According to the World Electronics Update 2020, the electronics sector crossed $2.9 trillion.

Moreover, acetone is largely used in semiconductor device manufacturing to remove photoresist materials from silicon wafers, a critical step in photolithography procedures. It is also used to clean and degrease semiconductor surfaces, which ensures high-quality device production. In January 2022, the Department of Commerce released a Request for Information to assist steer CHIPS Act-funded programs to support a robust domestic semiconductor sector. Moreover, countries like India depend on imports for almost all their semiconductor demands. The International Trade Administration further states that India imports 95 percent of its semiconductors from China, Taiwan, South Korea, and Singapore. Owing to the increased demand for semiconductors and electronics, the acetone market is expected to grow.
Asia Pacific's acetone market is anticipated to grow significantly.

The Asia Pacific acetone market is being boosted by rising industrialization in industries such as automotive, electronics, and chemicals in nations like India and China. Acetone is used to produce plastics, adhesives, coatings, and solvents, which helps the region's manufacturing growth. Increased acetone usage in products like polycarbonates by the plastics and polymers industry also increases demand. For instance, the Indian plastic industry is one of the significant industries in the country. The history of the plastic industry in India dates back to as early as 1957 with the production of polystyrene. As per the latest data reported by India Brand Equity Foundation in April 2024, the Indian government aims to boost the plastic industry's economic activity from Rs. 3 lakh crore (US$ 37.8 billion) to Rs. 10 lakh crore (US$ 126 billion) within the upcoming 4-5 years’ time span.

Another significant factor upsurging the acetone market is the growth in the electronics industry. In 2023, India's electronics sector was estimated at $155 billion, with local manufacturers accounting for 65%, as stated by Invest India. Nevertheless, as per Shanghai Municipal People’s Government, the retail sales of China's consumer electronics sector expanded by 4% to US$305 billion in 2023, with the growth rate increasing to 5% in 2024.

Alongside this, to pave the way for India’s technological leadership in the industry, the Semicon India Program was established with an incentive outlay of US$10 Billion to develop a sustainable semiconductor and display ecosystem in the nation. This material thus serves as a cornerstone and ensures the performance of a wide array of electronic products, which impacts market growth.

Technological developments and increased research spending further help drive innovation and sustainability in Asia Pacific's acetone industry. The use of acetone in the electronics and electrical sector, coupled with its usage in the automotive industry interior, fuels the demand for the product in the Asia Pacific region.

Global Acetone Market Key Developments:

In March 2022, Evonik achieved a significant milestone in the chemical industry. It produced the world's first sustainable isophorone product manufactured from 100% renewable acetone.

Evonik offers isophorone-based products with a much lower CO2 footprint across the isophorone manufacturing chain due to renewable acetone. The new eCO products are accessible through Evonik Crosslinkers' well-known brand families: VESTASOL IP eCO for isophorone, VESTAMIN IPD eCO for isophorone diamine, and VESTANAT IPDI eCO for isophorone diisocyanate.
In February 2022, Covestro signed a deal with Mitsui Chemicals to supply raw materials phenol and acetone from ISCC Plus certified mass-balanced sources. Both components were utilized to manufacture polycarbonate in Covestro's Asian facilities in Shanghai, China, and Map Ta Phut, Thailand.

The global acetone market is segmented and analyzed as follows:

By Application
Solvent
Bisphenol A
Methyl Methacrylate
Others
By End-Use
Paints & Coatings
Plastic
Automotive
Adhesives
Pharmaceuticals
Cosmetics
Electrical & Electronics
Others
By Geography
North America
United States
Canada
Mexico
South America
Brazil
Argentina
Rest of South America
Europe
United Kingdom
Germany
France
Italy
Spain
Rest of Europe
Middle East and Africa
Saudi Arabia
United Arab Emirates
Rest of Middle East and Africa
Asia-Pacific
China
India
Japan
South Korea
Taiwan
Thailand
Indonesia
Rest of Asia-Pacific