Ethylene Market - Insights, Opportunity Analysis, and Industry Forecast till 2025, by By Feedstock, Derivative, and Geography
Ethylene is the raw material derived from various hydrocarbons, which are largely used in the manufacturing of polymers such as fibers, polymer plastics and other organic chemicals. These products are widely used in construction, transportation, packaging, and many industrial and consumer markets, includes electrical/electronic, textiles, coatings & adhesives, and consumer chemicals.
Ethylene is derived from various feedstocks, among which naphtha and ethane are the dominant feedstocks used to produce ethylene globally. In 2016, these two feedstocks have together accounted for 84% of total ethylene production. The other feedstocks, namely, butane, propane, coal, methanol to olefins (MTO), and gas oil are also paving their way in the ethylene production. The production cost of ethylene varies a lot depending upon the feedstock prices. Currently, ethane is considered as the lot cheaper, effective and dominant feedstock for the production of ethylene in North America, and Middle East regions. North America, being the largest producer of natural gas in the world due to its vast shale gas reserves is producing ethylene in much lower cost among other regions. Also, Saudi Arabia is also using ethane as the feedstock in some plants and is able to produce ethylene in just approximately US$ 50 per metric ton. Furthermore, naphtha is the dominant feedstock used for the production of ethylene in Asia-Pacific and Western Europe regions. The production cost of ethylene with naphtha as a feedstock is much higher than other feedstocks. Due to which, China, one of the dominant ethylene producers in the world, has started producing ethylene by using coal in some of its ethylene plants. Moreover, the other feedstocks such as propane, and butane are also been used for the production of ethylene in USA, China, Japan, South Korea, India, and Middle East. Middle East and North America are dominant regions in using butane and propane as the feedstock for production.
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 used in the manufacturing of various key derivatives, namely, high density polyethylene (HDPE), low density polyethylene (LDPE), linear low density polyethylene (LLDPE), crosslinked polyethylene (PEX), and many more. LDPE and LLDPE are mainly used into various film applications includes food packaging, non-food packaging, shrink films, elastic films, and other uses. HDPE is highly used in blow molding and injection molding applications, namely, drums, containers, household goods, pallets and caps. HDPE is also used in extruded pipes for transporting gas, water and irrigation, as films in carrier bags, refuse sacks and industrial liner.
The capacity additions in the Asia-Pacific, North America, and Middle East regions is leading to the significant growth in the global ethylene market in terms of volume. During 2014 – 2020, North America Ethylene capacity will increase up to 45 million metric tons due to its low cost ethane feedstock. In India, Reliance Industries is slated for major capacity expansion in Jamnagar 3 project leading to increase in their ethylene capacity to 3.2 MMT from 1.9 MMT. 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 2017-18
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 ethanol 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.
This report segments the global ethylene market on the basis of feedstocks and derivative. On the basis of feedstock, the market is segmented as naphtha, ethane, butane, propane, coal, and others (gas oil, MTO). On the basis of derivative, the global ethylene market is segmented as polyethylene, ethylene oxide, ethylene dichloride, and others. Moreover, polyethylene is the largest derivative segment, accounting for over 60% share of the global ethylene market in 2016, while, ethylene oxide is projected to be the fastest growing derivative segment and expected to grow at a CAGR of 4.7% in terms of volume during the forecasted period.
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