The ethylene market is projected to grow at a rate of 5.70% in terms of value, from USD 105.83 Billion in 2020 to reach USD 166.78 Billion by 2028. Ethylene is a petrochemically derived monomer used for the manufacture of fibers, plastics, and other organic chemicals like naphtha, ethane, propane, and butane as a feedstock. Consumable or nondurable end uses, particularly packaging accounted for approximately more than half of ethylene consumption, worldwide. Ethylene is also is used in the artificial ripening of fruits as well as an anticoagulant in hematology. Polyethylene accounted for a significant share as well.
Ethylene is among the largest-volume petrochemicals with a diverse portfolio; its consumption is sensitive to both energy and economic cycles. Due to its size and broad usage, it is often used as a benchmark to estimate the performance of the petrochemical industry. Moreover, ethylene oxide is used for low-temperature sterilization to sterilize medical instruments, along with the production of ethylene glycol, which is used as a coolant and anti-freeze agents in industrial and commercial applications.
Ethylene also acts as a hormone in plants. It helps in stimulating or ripening of fruit, the opening of flowers, and the abscission of leaves. Commercial ripening rooms use catalytic generators to create ethylene from ethanol. When cucumber plant is treated with ethylene, it increases their number of female flowers and fruits.
Several factors are limiting the market growth. Countries are implementing legislation for environmental protection, which is likely to put pressure on the companies engaged in the production of the hydrocarbon-based gas. In addition, volatility in the feedstock cost is hindering the growth of the market to some extent.
The COVID-19 pandemic is having a significant impact on the ethylene industry. Demand for the product is suffering severe shocks across various end-use markets, worldwide supply chains are upset, and the competitive order of manufacturers/producers has witnessed a change. The shortage of demand has fast-tracked the global chemical sector into an oversupply situation. Movement restrictions appear to be a direct and immediate effect, and once the compulsory social distancing ends, it is expected things would get back to normal conditions.
Ethylene oxide is a man-made chemical used to make ethylene glycol. A very small amount, i.e., less than 1%, is used to control insects in some stored agricultural products, while a smaller amount is used in hospitals to sterilize medical equipment and supplies. HDPE is used in several packaging applications, including crates, trays, bottles for milk and fruit juices, caps for food packaging, jerry cans, drums, and industrial bulk containers, among others. Further, HDPE offers an improved impact strength in packaging application.
By industry vertical, the packaging industry dominated the market in 2019 and is estimated to grow at a rate of 2.8% in the forecast period. Ethylene finds usage in the packaging industry in the making of products such as polyethylene and ethylbenzene, among others, owing to the lightweight, strong in compression properties and thus safeguards delicate objects in case of being crushed or dropped. Also, it is a very good insulator, which enables it a strong electrostatic attraction to other objects, causing it to stick to things easily.
APAC will lead the demand for the ethylene market as countries like China and India exhibit strong demand for plastics. An increase in the purchasing power of consumers, rapid advancement in technology, and high penetration of electronics in these industries are driving the demand of the market product in the region.
The demand for ethylene in the US is expected to grow due to rising shale oil production, high sales of automobiles, and an increase in construction activity, and growing flexible packaging industry. Advancements in technology, increasing demand for plastics and basic chemicals, and the addition of ethylene capacity will propel the market demand in the region.
The major driving factor of the ethylene market is a varied range of applications of polyethylene. The demand for PE is from various end-users such as packaging, medical and healthcare, consumer goods, agriculture, and wiring and cables.
Over the past five years, consumption of ethylene has grown steadily, with the majority of the increased consumption being from North America, Northeast Asia, and the Middle East. The overall demand for ethylene derivatives is fueled primarily by the emerging world.
Implementation of stringent government regulations related to the production and application of ethylene is restraining the ethylene market. As ethylene is combustible and carcinogenic in nature, stringent regulations on its usage hamper its market growth.
China is investing heavily in steam crackers, which is driven by the healthy margins of the ethylene industry. The liberalization of the market in the region has made it possible for private companies to invest, along with state-owned producers. This change in the pattern of ownership has amplified the investment as producers are seeking to benefit from the high profit of the ethylene market.
The first modularized ethylene cracking furnace, fabricated for the 4,000ktpa, is in the complex of Zhejiang Petrochemical Co. Ltd. This cracking furnace produces 200,000 tons of ethylene per year. It is the largest single cracking furnace that has been modularized and transported ever worldwide while also being the largest ethylene cracking furnace in terms of production capacity in China to date.
Sinopec, BASF SE, Dow DuPont, Saudi Basic Industries Corporation, ExxonMobil Corporation, China National Petroleum Corporation, Royal Dutch Shell plc. JX Holdings, BP Plc., and Borealis AG, among others.
The players operating in the market have undertaken a number of strategies related to the market in the period 2017-2020. Some of the key highlights are:
In June 2020, Sinopec announced the expansion project to produce about 1 million tons of ethylene and refined oil per year in Hainan Free Trade Zone (South China). The projected is estimated to boost the growth of end-user industries with over RMB 100.00 billion (USD 14.10 billion).
The industry offers numerous growth opportunities. Thus, a number of startups providing innovative products and technologies have been entering the market. Some of them include Acuro Organics Limited and Aman Enterprises, among others.
Mergers and Acquisitions are an integral part of the industry. Along with the companies operating in the market, other key market players have also been entering the industry.
In October 2019, Saudi Basic Industries Corp (SABIC) made an announcement about the merger of its wholly-owned subsidiaries, Arabian Petrochemical Company (Petrokemya) and Saudi Petrochemical Company (Sadaf). The merger is intended to enhance the effectiveness and competitiveness of SABIC’s operations.
Reports and Data forecasts promising developments for increased adoption of ethylene. According to industry experts, the use of chemicals in the building & construction and automotive sectors is garnering significant traction in the market. New companies entering the industry would emphasize designing and developing innovative products, thereby catering to the increasing requirement of end-users.
This report forecasts revenue growth at a global, regional & country level, and provides an analysis of the industry trends in each of the sub-segments from 2018 to 2028. The scope of the report can be defined as:
For the purpose of this study, Reports and Data have segmented the global ethylene market on the basis of feedstock, application, end-users, and region:
Building and Construction
Rest of Europe
Rest of Asia Pacific
Rest of Latin America
Rest of the Middle East and Africa
The ethylene market is estimated to grow at a rate of 6.1% in the forecast period and is expected to reach a value of USD 166.78 Billion by 2028.
The market in the APAC region is likely to grow at the fastest rate in the forecast period.
The key application of ethylene in the packaging industry.
Future growth strategies adopted by the market players include mergers & agreements, acquisitions, contracts, expansions, and technological enhancements, among others.
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