Within Asia-Pacific, India to see largest PE demand growth in the next 10 years

Within Asia-Pacific, India is expected to see the largest plastic polyethylene (PE) demand growth from 3.6 million tons (mt) to 8.2 mt in the next 10 years. According to the “Platts Shale to Polyethylene Report – Global Outlook to 2023”, India’s PE demand is likely to increase by 129%, far surpassing Asia’s projected growth rate of 81% and China’s 87% for the period. Demand for high density polyethylene (HDPE), used in the manufacturing of such things as plastic sheeting for ducting and appliance hoods, is expected to climb to more than 4 mln mt by 2023, while demand for linear low density polyethylene (LLDPE), used in the making of such things as industrial containers, is projected to approach 3 million mt over the period. Demand for low density polyethylene (LDPE), used in the making of such things as kitchen cutting boards, is expected to reach 1.2 mln mt. “If projections are correct, India will be the second largest importer of polyethylene by 2023, behind China,” said Jim Foster, editorial director of petrochemical analysis at Platts. India’s expected polyethylene deficit will be 3.4 mln mt by 2023, behind China’s likely 12 mln mt shortfall and ahead of deficits forecasted for Africa and Europe. And while China’s demand is still clearly outpacing India’s, the latter is proving to be an influential customer in the growing polyethylene markets, during a decade outlook period where global oversupply is becoming more of a concern, he said. In the Report’s tracking of three ethylene cracker projects in India, all are expected to use naphtha as a feedstock. The first, Reliance’s Jamnagar refinery expansion, is on track to come online with 950,000 mt of ethylene in the fourth quarter of 2015. The one-million-mt ONGC Naheij OPAL unit in Dahej and the 220,000 mt BPCL Kochi Petrochemical Complex, are both in progress of securing license partners and could be facing start-ups in 2015 and 2018, respectively. Coal-to-olefins (CTO) may have a greater impact than shale gas, if China moves forward as planned. Not only is China adding ethylene production capacity, it is adding more than 14 million metric tons of additional polyethylene capacity between 2014 and 2021, much of which is being fed by the CTO produced ethylene. New Asian capacity – most of which is in China – will hit the global markets ahead of the new production planned for North America. The largest capacity gains in the Americas are projected to occur in 2017 and 2020, when new shale-based production comes on-stream. “Each of those two years will see increases of little more than two-million metric tons,” said Foster, “but in 2015 and 2016 alone, Asian PE capacity could climb more than 7 mln metric tons.”