An abundant supply of inexpensive natural gas-based feedstocks coming from the North America’s highly productive shale plays is revitalizing the polyethylene (PE) industry, according to a new IHS Chemical study. As a result, North American PE producers are establishing a competitive advantage in a highly competitive global market and that advantage is expected to continue throughout the 2012 to 2017 study period. “In North America, low-cost feedstock from shale gas is revitalizing the polyethylene business, making PE exports highly competitive globally,” said Nick Vafiadis, senior director, global polyolefins and plastics. “Many of the target export regions are investing in export-oriented plastics converting capacities, which will also help fuel polyethylene demand growth. In more mature markets such as Western Europe, we will see industry consolidation, operations optimization and movement toward production of higher value, performance products, since much of the profitability upside for ethylene producers comes from export of these high-value plastic resins.” The increasing availability of advantaged ethane feedstock from shale gas in the US has prompted almost all major North America polyolefin producers to announce ethylene or PE capacity additions that will come online within the next five years. Shell, Dow, Chevron Phillips, Equistar, Formosa, Oxy, Westlake, Williams, Nova and INEOS are all planning to either expand existing facilities or build new greenfield complexes. In addition, the arrival of large additional volumes from the Middle East is putting increasing pressure on high-cost producers in Europe and Asia. Current estimates project cumulative global additions of more than 47 mln metric tons (MMT) of polyethylene capacity by 2022. Major exporters within the Asia Pacific region, the Middle East and the US will continue to benefit from China’s insatiable appetite for external polyethylene supplies.