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Global Ethylene Market - To Surpass US $230 Billio

n by 2025, Buoyed by Rampant Capacity Expansion By


Major Players

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REPORT DESCRIPTION
Ethylene Insights:
The Global Ethylene Market was estimated at US$ 121.07 Billion and 146.6 million metric tons in 2016, according to a
new report published by Coherent Market Insights. Ethylene is a colorless, flammable gas with sweet and musky odor,
having molecular formula C2H4. Ethylene is widely used in the manufacturing of various derivative such as polyethylene,
ethylene oxide, ethylene dichloride and others. Ethylene is also used in agriculture industry as a natural plant hormone,
which helps in ripening of fruits. Manufacturing industry uses various processes in the manufacture of ethylene, which
includes, steam cracking of hydrocarbons followed by compression and distillation. There are various feedstocks which are
used in the production of ethylene includes naphtha, ethane, butane, propane, coal, and others (Methanol to olefins (MTO),
gasoil).

Ethylene is mainly used in the production of polyethylene, which finds wide applications in packaging industry,
automobiles, construction and manufacturing units. These are mainly attributed due to its high tensile strength, resistance to
chemicals and heat.

Key Feedstock Trends and Analysis of the Ethylene market:

Naphtha feedstock segment dominated the ethylene market in 2016, according to the stats provided by Coherent Market
Insights. Naphtha is the largest feedstock used in the Asia-Pacific, and Western Europe regions. Ethane is the dominant
feedstock used in North America, and Middle East regions. The production cost of ethylene is comparatively low with
ethane as a feedstock compared to naphtha.

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REPORT DESCRIPTION
Key Feedstock Trends and Analysis of the Ethylene market:
Saudi Arabia being one of the largest producer of oil and gas in Middle East region is able to produce ethylene in just
approximately US$ 50 per metric ton with ethane as a feedstock, which in turn is leading to the high capacity addition in
the region. The Gulf Cooperation Council (GCC) countries contributed 11% of global petrochemical-capacity growth
over the past ten years and are now a leading global producer and supplier to world markets of ethylene and its
derivatives. There are many projects which are under construction or at the planning stage in Saudi Arabia, Kuwait, Abu
Dhabi, and Oman would be able to add a further 34 million tons of annual capacity over the following years, which in
turn will increase the GCCs share of global ethylene production from 18% to 21% by 2025.

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In Asia-Pacific, China is the largest coal consuming country in developing energy has started using coal and MTO as a
feedstock to produce ethylene from its coal to olefins (CTO) and methanol to olefins (MTO) plants. This has lowered the
cost of producing ethylene at a much higher rate in the country, which in turn has led to lot of capacity expansions of
ethylene in China. Furthermore, the ethylene capacity in India for fiscal year 2016-17 is projected at 4.8 MMT which
includes Reliance J3 expansion as well as ONGC Petro additions Limited (OPAL) having commissioned its mega
petrochemical complex at Dahej. The total ethylene capacity in India is projected to be 7.2 MMT during fiscal year 2017-
18.
Hence, the feedstock cost trends are largely driving consumption growth between geographic regions. The growing
consumption of ethane, propane, butane and coal for the low cost of production of ethylene is the major factor for the
robust growth in the ethylene market during the forecast period.
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Key takeaways of the market:
Asia Pacific is expected to dominate the market in 2016 and the trend is expected to remain the same during 2017-2025.
The increasing demand of ethylene derivatives in various end-use industries such as packaging, automobile, and
construction industry, and continuous capacity addition of ethylene in China and India over following years are the
major driving force to position Asia-Pacific as the largest and fastest-growing region in the global ethylene market.
Moreover, North America is expected to experience a second highest CAGR of 5.6% in terms of volume, during the
forecast period. This is due to the shale gas boom in the country is leading to the huge growth in the natural gas
production which in turn is allowing North America for the huge capacity addition in the following years.

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The market in Middle East is expected to register a significant growth rate over the forecast period. Capacity addition
coupled with cheap raw material price are expected to create lucrative growth opportunities for the market in this region.
For instance, Sadara Chemical Company announced to increase their ethylene production capacity by 1500 thousand
metric tons per year in Saudi Arabia.

There are various organic, and inorganic growth strategies which are being followed by the leading market players in the
market. Capacity expansion is leading to the key driver in the acquisition and joint ventures. For instance, Mexichem
had signed a 50/50% co-investment agreement with OxyChem to build a 550 thousand ton annual capacity ethylene
cracker, investing close to US$1.5 billion, and is expected to start operation in 2017.

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