Global Ethylene Market to Surpass US $230 Billion by 2025,

The Global Ethylene Market was estimated at US$ 121.07 Billion and 146.6 million metric tons in 2016, according to a new report published by Coherent Market Insights. Ethylene is a colorless, flammable gas with sweet and musky odor, having molecular formula C2H4. Ethylene is widely used in the manufacturing of various derivative such as polyethylene, ethylene oxide, ethylene dichloride and others. Ethylene is also used in agriculture industry as a natural plant hormone, which helps in ripening of fruits. Manufacturing industry uses various processes in the manufacture of ethylene, which includes, steam cracking of hydrocarbons followed by compression and distillation. There are various feedstocks which are used in the production of ethylene includes naphtha, ethane, butane, propane, coal, and others (Methanol to olefins (MTO), gasoil).

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Ethylene is mainly used in the production of polyethylene, which finds wide applications in packaging industry, automobiles, construction and manufacturing units. These are mainly attributed due to its high tensile strength, resistance to chemicals and heat.
Key Feedstock Trends and Analysis of the Ethylene market:
Naphtha feedstock segment dominated the ethylene market in 2016, according to the stats provided by Coherent Market Insights. 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% on comparing with naphtha as a feedstock. 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. The region has witnessed over 2 million MT/Year of ethylene capacity addition during the past four years and over 620,000 MT/ year ethylene production is expected to add by 2017.

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, which in turn is leading to the high capacity addition in the region. The Gulf Cooperation Council (GCC) countries contributed 11% of global petrochemical-capacity growth over the past ten years and are now a leading global producer and supplier to world markets of ethylene and its derivatives. There are many projects which are under construction or at the planning stage in Saudi Arabia, Kuwait, Abu Dhabi, and Oman would be able to add a further 34 million tons of annual capacity over the following years, which in turn will increase the GCC’s share of global ethylene production from 18% to 21% by 2025.

The regions such as Middle East, and North America are also using 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.

In Asia-Pacific, China is the largest coal consuming country in developing energy has started using coal and MTO 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. Furthermore, the ethylene capacity in India for fiscal year 2016-17 is projected at 4.8 MMT which includes Reliance J3 expansion as well as ONGC Petro additions Limited (OPAL) having commissioned its mega petrochemical complex at Dahej. The total ethylene capacity in India is projected to be 7.2 MMT during fiscal year 2017-18.

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.

Key takeaways of the market:
Asia Pacific is expected to dominate the market in 2016 and the trend is expected to remain the same during 2017-2025. The increasing demand of ethylene derivatives in various end-use industries such as packaging, automobile, and construction industry, and continuous capacity addition of ethylene in China and India over following years are the major driving force to position Asia-Pacific as the largest and fastest-growing region in the global ethylene market. Moreover, North America is expected to experience a second highest CAGR of 5.6% in terms of volume, during the forecast period. This is due to the shale gas boom in the country is leading to the huge growth in the natural gas production which in turn is allowing North America for the huge capacity addition in the following years.

The market in Middle East is expected to register a significant growth rate over the forecast period. Capacity addition coupled with cheap raw material price are expected to create lucrative growth opportunities for the market in this region. For instance, Sadara Chemical Company announced to increase their ethylene production capacity by 1500 thousand metric tons per year in Saudi Arabia.

Polyethylene industry is one of the key industries for the use of Ethylene. Polyethylene are widely used in the manufacture of high density polyethylene (HDPE), low density polyethylene (LDPE), linear low density polyethylene (LLDPE), crosslinked polyethylene (PEX), and many more which finds wide applications in various food & non-food packaging, shrink & elastic films, extruded pipes, and molding. For instance, The Dow Chemical Company has a 250,000 MT/year polyethylene expansion at its Louisiana Operations complex in Plaquemine set for completion by end-2017, is expected to boost the market for polyethylene, which in turn is driving the ethylene market during the forecast period. Also, in 2016, Gail India Ltd. has commissioned a new processing line for polyethylene at its Pata petrochemical facility in Uttar Pradesh (UP) increasing its PE capacity by 400,000 tonnes per annum (TPA).
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, and others are few of the key players in global ethylene market.

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There are various organic, and inorganic growth strategies which are being followed by the leading market players in the market. Capacity expansion is leading to the key driver in the acquisition and joint ventures. For instance, Mexichem had signed a 50/50% co-investment agreement with OxyChem to build a 550 thousand ton annual capacity ethylene cracker, investing close to US$1.5 billion, and is expected to start operation in 2017. Also, there are lot of capacity expansions is been done in Asia-Pacific region from both domestic and international market players includes 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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This release was published on openPR.