Ethylene Market in Transition: Ceresana Analyzes World Market for the Most Important Basic Chemical

Ethylene is the by far most important raw material in the petrochemical industry. About 130 million tonnes of ethylene were processed worldwide in 2013. Direct applications include, among others, the three polyethylene plastics HDPE, LLDPE, and LDPE as well as petrochemical intermediates, which are in turn mainly used for the production of plastics. The most important of these are ethylene oxide, ethylene dichloride and ethylbenzene. The new "Market Study Ethylene" by Ceresana offers a complete overview over this growth market. It analyses important recent influential factors in detail, for example the consequences of the shale gas boom in the USA. Forecast cover the time up until 2021.

Market Study Ethylene

Declining Oil Price Threatening Fracking

The shale gas boom in the USA has far-reaching consequences for the global ethylene market: The substantial decline of prices for ethane led to the construction of several new ethane crackers. In contrast to other feedstocks such as naphtha or propane, the cracking of ethane yields a rather high amount of ethylene. Should the current downward slide of oil prices continue, however, the US fracking industry might lose its foothold; Ceresana analyses the long-term implications.

Ethylene Prices Under Pressure

Forced by much higher production costs in Europe, several European produces have already announced to close crackers or to change over to using imported ethane as feedstock. Ceresana expects the global supply of ethylene to increase much more quickly than demand, due to massive capacity expansions. As a result, capacity utilization will fall, increasing pricing pressure. Therefore, Ceresana forecasts revenues generated with ethylene to rise by 3.2% p.a. until 2021 and thus at much lower growth rates than in the previous eight year period.

Increase in China and the Middle East, Reduction in Western Europe

Following a growth rate of 9.1% p.a. between 2005 and 2013, the Middle East became a center of the global ethylene industry. Production volume in this region is projected to increase by up to another 10 million tonnes until 2021. One of the main customers is China that imports large amounts of ethylene and ethylene-based plastics such as HDPE, LLDPE, and LDPE. Many producers of ethylene and polyethylene are dependent on these exports to China. The Chinese government, however, is trying to significantly increase self-sufficiency in regard to ethylene and its downstream derivatives. China intends to open additional naphtha crackers and to increase the use of coal in the production of olefins. Eastern Europe, dominated by development in Russia, and Africa are also expecting to see a high relative increase of production volume. As a response to pricing pressure, ethylene output in Western Europe will fall.

Basis for Plastics

The majority of all ethylene produced is consumed in the polyethylene industry. Depending on density and rigidity of the product, polyethylene is classified as either HDPE, LDPE or LLDPE. Two thirds of global demand for ethylene in 2013 stemmed from the production of these plastics. While demand for LDPE will increase only moderate, Ceresana forecasts a notable expansion of capacities for HDPE and LLDPE, in Asia-Pacific and the Middle East in particular. Another application area of huge growth potential is the production of ethylene oxide. Ethylene oxide is mainly used to produce ethylene glycol which is a pre-product for polyester. The production of textile fibers is growing significantly, especially in Asia. Additionally, producers of ethylene oxide are profiting from the substitution of glass by PET bottles. We forecast global demand for ethylene in the production of ethylene oxide to increase by about 3.2% per year.

The Study in Brief:

Chapter 1 is a description and analysis of the global market for ethylene. Development of demand, revenues, and production are explained in detail. Additionally, data on existing and future production capacity is provided. This report also offers an extensive insight into the development in individual countries and regions.

Chapter 2 examines the 32 largest countries of the market in more detail and provides information on demand, revenues, production, import, and export of ethylene as well as capacities. Demand for ethylene in the production of HDPE, LLDPE, LDPE, ethylene oxide, ethylene dichloride (EDC), ethylbenzene, and other applications will be analyzed in detail.

Chapter 3 provides a detailed analysis of applications of ethylene, e.g. its use in the manufacturing of HDPE and all other applications. This study contains data on demand development, split by Western Europe, Eastern Europe, North America, South America, Asia-Pacific, the Middle East and Africa as well as consumption figures for individual countries in these regions.

Chapter 4 is a useful directory of producers, clearly arranged according to contact details, turnover, profit, product range, production sites, profile summary, product-specific information as well as existing and future capacities at individual production sites.
Extensive profiles of 119 manufacturers are given, including Braskem, Chevron Phillips, Dow Chemical, ExxonMobil, Formosa Plastics, LG Chem, LyondellBasell, NPC, NOVA Chemicals, Petrochina, PTT Global, Sabic, Shell and Sinopec.

About Ceresana

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