The World olefins scenario is fast changing, as demand and capacity both witness a shift from North America and Europe to the Middle Eastern and Asian regions.
Ethylene demand in 2006 will grow from 110 mln tons to 137 mln tons by 2011 at an average rate of 4.3%. This growth rate is marginally higher than the global GDP growth. Ethylene capacity in 2006, will grow from 21 mln tons to 156 mln tons by 2011 at an average growth rate of 5.2%. This will result in a reduction in capacity utilization from almost 92% in 2006 to about 87%. This will peg capacity utilization at a rate attractive and healthy enough for reinvestment or profitability. PE has the major market share of ethylene accounting for almost 60%. EO/EG & VCM are the other two applications that account for 25% of ethylene demand. Consumption pattern is likely to remain along similar lines in 2011.
Ethylene capacity of 121 mln tons in 2006 is skewed in favour of North and South America. These two regions accounted for almost 33% of global capacity. Asia had a 30% share, while Europe had a 25% share of global capacity. The Middle Eastern region had only 12% of the World�s ethylene capacity. This situation is going to change by 2011. Ethylene capacity in 2011 is expected to be 156 mln tons, growing at an average growth of 5.2 %, higher than demand growth. However, the distribution of capacity across the regions will dramatically change. North and South America will lose its share by about 7% and will have only 27% of the global capacity. Similarly, Europe will lose the share by 5% to have its shore at 20%. Asia, due to higher demand of derivatives will gain 3% of global share and will have almost 33% of global capacity. The most remarkable capacity addition will be in the Middle East region. This region will add almost 17 mln tons of capacity and will gain 8% of the global market share, spiking its share in total capacity to 20%.

Propylene demand in 2006 was 69 mln tons, and is estimated to grow to 88 mln tons at an average rate of about 5%. The capacity of propylene will grow from 81mln tons in 2006 to 101 mln tons in 2011 at an average rate of 4.5%. Capacity utilization will increase from 85% in 2006 to 87% in 2011. This higher capacity utilization, although just 2% more over 5 years, will increase the attractiveness of investment in propylene more than that in ethylene. A large proportion of additional capacity will come from cracker (almost 57%). Asian demand is more compared to capacity and will remain until 2011. In fact, the gap will increase from 2 mln tons to 5 mln tons from 2006 to 2011.