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Global polyethylene market to 2018

Hydrocarbon Engineering,

A new report from GlobalData has forecast that polyethylene demand is to rise by approximately 3.7% /y between 2013 and 2018, at a slightly higher level than its growth during the 2003 – 2013 period. The report states that this higher than historic increase will happen in the US and Europe, and primarily Russia. The US is forecast to witness a 2.4% growth rate /y in comparison with its 0.7% levels in the previous 10 years. Demand in Europe, including Russia, is expected to climb at 2.8% /y from 2013 – 2018, almost three times the level witnessed during the last decade. Global data believes that these demand rises in the US and Russia will be somewhat offset by a lower increase of 4.8% in Asia, compared to the 6% rate during the 2003 – 2013 period. This will be primarily due to the region’s slower economic growth.


Carmine Rositano, Managing Analyst, Downstream Oil and Gas, GlobalData, said, ‘lower feedstock costs from US shale gas production are providing the country with a competitive advantage, with increasing investments in its petrochemical plants driving polyethylene demand growth in both domestic and international markets. Although below recent historical levels, demand in Asia remains fairly robust and will continue to boost expansion in the global polyethylene market.

‘As a result, polyethylene capacity is now expected to increase to approximately 5.3% /y between 2013 and 2018, which is higher than the 3.6% experienced over the last decade. Capacity additions will be most prevalent in the US, given its advantaged cost competitive position, and also Russia, which is augmenting its petrochemical industry to reduce its reliance on imports. New capacity will also continue to come online in Asia, but at a slower than historic rate.’


The report states that despite the lower estimated cost of crude oil in the forward price curve to 2018, prices for polyethylene will increase at approximately 1.3% /y up to the end of the forecast period. This is attributable to petrochemical demand increasing at approximately three times the rate of that for oil.

Rositano concluded, ‘the key trend emerging in the polyethylene market will be the ongoing surplus position in the US, where excess production will be directed to expanding markets in South America and Asia. Additionally, the lower feedstock and fuel costs for US plants, compared with those in Europe, will likely result in future European plant closures and further adjust global polyethylene trade flows.’

Adapted by Claira Lloyd

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