GLOBAL ETHYLENE MARKET TO SURPASS US$ 230 BILLION BY 2025, BUOYED BY RAMPANT CAPACITY EXPANSION BY MAJOR PLAYERS

Ethylene– Insights

Ethylene is the lightest olefinic hydrocarbon or organic hydrocarbon is the basic raw material generally derived from various hydrocarbons which are largely used in the manufacturing of polymers such as fibers, polymer plastics and other organic chemicals. Naphtha and ethane are the major feedstocks used to produce ethylene globally. The other feedstocks used in manufacturing ethylene are butane, propane, coal, methanol to olefins (MTO) and gas oil.

Naphtha feedstock segment dominated the ethylene market in 2016. Naphtha is the largest feedstock used in the Asia-Pacific, and Western Europe regions. Ethane is the dominant feedstock used in North America, and Middle East regions. The production cost of ethylene is comparatively low with ethane as a feedstock compared to naphtha. In North America, the boom in exploiting shale gas reserves has led in producing low cost ethane gas, hence lowering the production cost of ethylene to 60% as compared to naphtha as a feedstock. Saudi Arabia being one of the largest producer of oil and gas in Middle East region is able to produce ethylene in just approximately US$ 50 per metric ton with ethane as a feedstock. Moreover, the regions such as Asia-Pacific, Middle East, and North America are also using coal, propane, butane and MTO as a feedstock to produce ethylene at a low cost on comparing with naphtha. Currently, North America and Middle East are the dominant regions for consuming propane and butane as a feedstock for producing ethylene in much lower cost than naphtha. Furthermore, the boom in exploiting shale gas reserves for the production of ethane in North America has led to a lot of capacity expansions in ethylene plants. Also, China which is the largest coal consuming country in developing energy has started using coal as a feedstock to produce ethylene from its coal to olefins (CTO) and methanol to olefins (MTO) plants; This has lowered the cost of producing ethylene at a much higher rate in the country, which in turn has led to lot of capacity expansions of ethylene in China. Hence, the feedstock cost trends are largely driving consumption growth between geographic regions. The growing consumption of ethane, propane, butane and coal for the low cost of production of ethylene is the major factor for the robust growth in the ethylene market during the forecast period.

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Ethylene is the raw material which is used in the manufacture of various derivatives such as polyethylene, ethylene oxide, ethylene dichloride and other derivatives, namely, ethyl benzene, vinyl acetate, alpha olefins, etc. Polyethylene is estimated to be the largest derivative segment and has accounted for over 60% in the global ethylene market. Polyethylene is widely used in the manufacturing of various key derivatives, namely, high density polyethylene (HDPE), low density polyethylene (LDPE), linear low density polyethylene (LLDPE), cross-linked polyethylene (PEX), and many more. These derivatives are largely used in food & non-food packaging, shrink & elastic films, extruded pipes, and molding applications. Hence, the growing polyethylene market in developing regions such as Asia Pacific, Latin America, and Middle East regions is making polyethylene as the largest derivative segment in the ethylene market.

The global Ethylene market was valued at US$ 107.65 billion and 146.6 million metric tons in 2016 and is expected to expand at a CAGR of 8.7% in terms of revenue and 5.3% in terms of volume during 2017 – 2025.

Ethylene Oxide has emerged as the fastest growing derivative for ethylene market

Ethylene oxide derivative segment is expected to be the fastest-growing derivative in the ethylene market over the forecast period. The ethylene oxide is largely used as a raw-material to manufacture ethylene glycol. The various monoethylene glycol (MEG) compounds are used to manufacture polyester fibres for textile applications, PET resins for bottles and polyester film, and in various antifreeze applications. The other derivatives of ethylene oxide includes ethyoxylates is largely used in kitchen cleaners, shampoos, etc., glycol ethers which is mostly used in fuels, solvents, etc., and ethanolamines which has find its vast use in personal care products, surfactants, etc. This in turn is making ethylene oxide as the fastest-growing derivative in ethylene market, globally.

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Regional Insights

Asia Pacific, North America, Middle East and Europe accounted for major share in the global ethylene market both in terms of revenue and volume in 2016 and the trend is estimated to remain the same over the forecast period. In 2016, Asia Pacific held a share of 31.7% in terms of volume. The growing demand for ethylene for the production polyethylene which is largely used in packaging, pipes, and shrinks & elastic films applications. Hence, the growing packaging, plumbing, automobile, and construction end-use industries in Asia Pacific due to growing population, and increased urbanization and commercial sector is expected to drive the growth of the global ethylene market over the forecast period. For instance, as per statistics released by India Brand Equity Foundation (IBEF)—a Trust established by the Department of Commerce, Ministry of Commerce and Industry, Government of India—the Indian government plans to invest US$ 376.53 billion in infrastructure development over the following three years. Furthermore, the capacity additions in China, and India is leading to the key growth driver for ethylene market in Asia-Pacific region over the following years. During 2015-2020, the ethylene capacity growth is projected to increase at 45% in china, 10% in India, and 5% in South East Asia. In 2017, the lot of capacity expansions is scheduled by various companies, namely, Jiangsu Sailboat (China - 320 thousand tons per year), KPIC (Korea - 330 thousand tons per year), Shenhua Ningmei (China - 430 thousand tons per year), Changzhou Fund (China - 130 thousand tons per year), Zhongtian Hechuang No2 (China - 300 thousand tons per year), Reliance Jamnagar (India – 1,365 thousand tons per year), CNOOC Shell (China - 1000 thousand tons per year), Lotte Titan (Malaysia – 92 thousand tons per year), and Shaanxi Yanchang (China - 300 thousand tons per year).

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Multinational players

Major players in the global ethylene market includes Saudi Basic Industries Corporation (SABIC), Exxon Mobil Corporation, The Dow Chemical Company, Royal Dutch Shell plc, China Petroleum & Chemical Corporation (Sinopec Corporation), Chevron Phillips Chemical Company LLC, Total S.A., LyondellBasell Industries, National Petrochemical Company (NPC), and INEOS Group AG.

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This release was published on openPR.