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Ethylene Market

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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.
Global Ethylene Market to Surpass US $230 Billion by
2025, Buoyed by Rampant Capacity Expansion By
Major Players
The ​Global Ethylene Market was estimated at US$ 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.
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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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arket-371
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).
About Coherent Market Insights:
Coherent Market Insights is a prominent market research and consulting firm
offering action-ready syndicated research reports, custom market analysis,
consulting services, and competitive analysis through various recommendations
related to emerging market trends, technologies, and potential absolute dollar
opportunity.
Contact Us
Mr. Shah
Coherent Market Insights
1001 4th Ave,
#3200
Seattle, WA 98154
Tel:+1-206-701-6702
Email: ​[email protected]
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