Ethylene has shown robust and consistent growth over the period 2015 to 2019, according to GlobalData, and is expected to increase at a healthy 2.5% compound annual growth rate (CAGR) over the decade.
Asia has been the largest contributor, both in terms of demand and supply, and is likely to continue its dominance.
Dayanand Kharade, Oil and Gas Analyst at GlobalData, said: “Growth in the ethylene market is expected despite a short-term slowdown in demand. The economic impacts of COVID -19 triggered a steep downfall in ethylene demand growth in 2020. This is expected to rebound in 2021, and is likely continue to be around 2%-3% until 2025.”
Kharade continues: “Asia’s dominance in ethylene is largely due to demand from the packaging, construction and electrical industries in growing countries such as China, South Korea and India. Growth in demand is also expected in North America and the Middle East, mainly due to increasing ethylene derivatives production targeting both the domestic market and exports. These regions capitalise on superior ethylene cost competitiveness due to feedstock advantage.”
Ethylene capacity additions are largely concentrated in Asia - mainly from China, as the country is targeting self-sufficiency to meet its existing and growing ethylene demand. China is followed by the US, India and Iran.
Kharade adds: “With global capacity additions expected to exceed projected increase in demand, there could be concerns related to oversupply in the near term - and hence a probable lowering of operating rates.”
Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/10062021/global-ethylene-demand-growth-set-for-market-recovery/
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