North America and Asia to lead Polyethylene capacity additions till 2023

21-Jun-19

Global polyethylene capacity is poised to see considerable growth over the next five years, potentially increasing from 110.12 mln tpa in 2018 to 157.02 mln tpa in 2023, registering a total growth of 43%, led by Asia and North America, as per a report by GlobalData. The report reveals that around 159 planned and announced plants are scheduled to come online, predominantly in Asia and the Middle East, over the next five years.

Polyethylene capacity in Asia is expected to increase from 39.87 mln tpa in 2018 to 57.1 mln tpa in 2023, at an average annual growth rate (AAGR) of 7.2%. Among the countries in the region, China will add a capacity of 7.56 mln tpa by 2023. Major capacity addition will be from the plant, Dushanzi Petrochemical Co. Dushanzi Polyethylene Plant 2 (Swing), with a capacity of 600 000 tpa by 2023.

Dayanand Kharade, Oil and Gas Analyst at GlobalData, says: “In Asia, China, with its huge population and growing economy, is expected to continue to rise in polyethylene demand. To meet this demand, the country is set to have large capacity additions. China will account for more than 40% of Asia’s polyethylene capacity additions.”

North America is identified as the second highest in terms of polyethylene capacity additions in the global polyethylene industry. It is expected to increase from 23.15 mln tpa in 2018 to 33.82 mln tpa in 2023, at an AAGR of 7.6%. Most polyethylene capacity additions are from the US, with capacity of around 9.35 mln tpa by 2023. Major capacity addition will be from the plants, Exxon Mobil Corp. Beaumont High Performance Polyethylene Plant and Chevron Phillips Chemical Co. Pasadena Polyethylene Plant, with capacities of 1.30 mln tpa and 990 000 tpa, respectively.

Within the Middle East, polyethylene capacity is expected to increase from 20.8 mln tpa in 2018 to 28.52 mln tpa in 2023, at an AAGR of 6.3%. Among countries, Iran’s capacity will add around 5.54 mln tpa by 2023. Major capacity additions will be from the plants, Total NPC Hormozgan Polyethylene Plant 1 and Total NPC Hormozgan Polyethylene Plant 2, each with the capacity of 500 000 tpa by 2023. Kharade added, “For North America and Middle East, the low-cost abundant supply of natural gas is the primary reason for the rush in polyethylene capacity additions. In addition to feedstock advantage, target exports to other American countries are also the reason for large capacity additions in the US. Iran, on account of cheaper feedstock and proximity to booming Asian markets, is set to add large capacity in the upcoming period.”

Polyethylene capacity in Former Soviet Union (FSU) is expected to increase from 2.8 mln tpa in 2018 to 9.168 mln tpa in 2023, at an AAGR of 22.6%. Russia is forecast to be the top country in the region with capacity additions of 4.63 8 mln tpa by 2023. Major capacity additions will be from the plant, Far East Petrochemical Co. Nakhodka Polyethylene Plant, with a capacity of 880 000 tpa by 2023.

Africa is the fifth highest, increasing from 2.05 8 mln tpa in 2018 to 4.70 8 mln tpa in 2023, at an AAGR of 16.6%. Egypt leads in Africa in terms of capacity additions and it is expected to add a capacity of 1.35 8 mln tpa by 2023. Badlands NGLS LLC, Oil and Natural Gas Corp Ltd and Royal Dutch Shell Plc are the top three companies globally in terms of planned capacity additions over the outlook period.

The report also states that the three highest planned and announced global polyethylene capacity addition plants in the outlook period are ‘Bharat Petroleum Corp. Rasayani Polyethylene Plant’ in India, ‘Far East Petrochemical Co. Nakhodka Polyethylene Plant’ in Russia, and ‘HPCL Rajasthan Refinery Pachpadra Polyethylene Plant (Swing)’ in India with capacities of 1.50 8 mln tpa, 880 000 tpa and 830 000 tpa, respectively.

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