Global ethylene demand not to reach 2008 peak levels for the next 6-7 years, largest increases in ethylene production

Global ethylene demand not to reach 2008 peak levels for the next 6-7 years

25-Jan-11

In 2008, the sales volume of ethylene reached its peak of over US$160 bln. Though sales volume decreased in 2009, it is expected to reach record levels peaked in 2008 during 2017, as per a report by Ceresana Research. Prices have already recovered during 2010, after falling by about 35% in 2009. The report expects to see a more dynamic development of the ethylene demand starting in 2010. An important factor which will impact the global ethylene market is the rigorous capacity expansion of ethylene and downstream products in the Middle East and China. Countries of the Middle East exhibit the largest increases in ethylene production and demand. The volumes in this area have doubled over the past eight years and we expect that they will double again until 2015. Ethylene capacities in this region will have increased by 20 million tons in 2017. The Asia-Pacific region will continue to dominate the market in future and generate more than a third of the worldwide demand. The pioneer will be China that will rise to become the greatest ethylene consumer worldwide and will therefore drive out the United States to the second place, followed by Saudi Arabia. Among the most important buyers are producers of HDPE. They account for a third of ethylene demand. On the second place are producers of LLDPE and LDPE. The production of ethylene oxide makes up approximately 11% of the worldwide ethylene demand, followed by ethylene dichloride and ethylbenzene. Other application areas account for 7%. By 2017, we anticipate seeing the greatest increase in consumption for ethylene oxide, LLDPE and HDPE with 3.5% to 4.5% per year. HDPE is primarily used for packaging and construction materials. With nearly 80%, the most important market for LLDPE is foils and bags. Ethylene oxide is mainly used to produce ethylene glycol which is above all a pre-product for polyester. The production of textile fibers is mainly in Asia increasing considerably. In addition, ethylene oxide producers benefit from the increasing substitution of glass by PET bottles and containers.