China will be the principal driver of polyethylene demand till 2020

The Chinese polyethylene market size was US$$13,865 million in 2008 and is forecast to grow by more than 8%, accounting for nearly 17% of the global polyethylene demand in 2020 as per Global Markets Direct. China has emerged as the principal manufacturing and export location for low value plastic products in the world due to low cost manpower and significant government support. The rapid increase in downstream processing capacity additions, primarily geared towards export markets, will be the main driver of polyethylene demand in the future. With over 40% of the demand dependent on imports, China will continue to remain the largest importer of polyethylene in the world in spite of the many polyethylene capacity additions expected to come on-stream in the next few years. The Middle East region will see more than 7 mln tons of polyethylene capacity additions in the next few years. Accounting for more than 50% of the global planned polyethylene capacity additions, the Middle East region will emerge as the largest exporter of polyethylene in the world. Production of polyethylene in most countries will be unable to compete with the Middle East production as feedstock costs of the Middle East producers are 1/5th of the cost of feedstock available to Asian and European producers.
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