Global ethylene market to reach US$234.2 bln by 2020

The global ethylene market was worth US$156 billion in 2013 and, thanks to the consistent growth of its many end-use industries, is expected to reach a market value of US$234.2 billion by 2020, as per Transparency Market Research. This represents a progressive CAGR of 6% from 2014 to 2020. Ethylene is not used directly in industries but is a crucial ingredient in the manufacture of other industrial products such as ethylene oxide, polyethylene, ethylene dichloride, ethylene benzene, and others such as alpha olefins and vinyl acetate. The commercial importance of the chemicals produced via ethylene, and by inference ethylene itself, becomes clear in view of the industries in which they are used. The automotive and construction industries, in particular, are enjoying stellar growth figures all over the world at present. The packaging industry is also posting strong figures due to the rise of ecommerce and globalization of foodstuff. This means that there is a huge price margin in ethylene production. Petrochemical giants, which have a ready in-house supply of crude oil, are the largest producers of ethylene, along with multinational chemicals giants such as BASF and Dow. The global ethylene market is divided on the basis of end-use industry, application, i.e. the substance for the production of which ethylene is used, and geography. The packaging industry and production of polyethylene lead the global ethylene market in terms of end use and application, respectively. These two aspects go hand in hand, as the packaging industry is the single largest consumer of polyethylene, deriving virtually its entire demand from the global ethylene market in the form of polyethylene. Polyethylene accounts for 50% of the ethylene market by application, whereas the packaging industry takes up a 30% share. The ongoing growth of the global packaging industry, expected to carry on and even pick up speed in the next few years, will thus help the global ethylene market grow by leaps and bounds. Among other ethylene derivates, ethylene oxide will register the fastest growth from 2014 to 2020, thanks to its usage in the production of ubiquitous plastic items such as plastic bottles. As mentioned before, the automotive and construction industries are the other major end-use applications of the ethylene market. Agrochemicals, textiles, and other small applications such as production of detergents accounts for a small but significant share of the global ethylene market. Asia Pacific – one of the regional segments of the global ethylene market along with North America, Latin America, Europe, and Rest of the World – is home to four of the most rapidly emerging economies in the world: China, Japan, South Korea, and India. These four countries all have booming automotive industries, all have extensive infrastructure and private construction projects lined up, and their large Internet-savvy population means that the packaging market also has a strong and expanding presence in the region. Thus, the strong presence of the top three end users of the global ethylene market has led to Asia Pacific being the regional leader in the global ethylene market. The developing region accounts for a majority 30% share of the global ethylene market, with China and Japan leading the way. The booming Japanese, Korean, and Chinese automotive industries in particular reflect strong growth prospects for the Asia Pacific ethylene market in the forecast period. The strength of the Chinese petrochemical industry will also help the Asia Pacific market take in its stride the one major hurdle before the ethylene market: fluctuating crude oil prices.