Published October 2014
Ethylene is primarily a petrochemical-derived monomer used as a feedstock in the manufacture of polymer plastics, fibers and other organic chemicals that are ultimately consumed in the packaging, transportation and construction industries and in a multitude of industrial and consumer markets. Nondurable or consumable end uses—in particular, packaging—make up more than half of ethylene derivative consumption worldwide. One plastic resin in particular, polyethylene, accounts for the majority of ethylene consumption. Because ethylene is one of the largest-volume petrochemicals worldwide, with such a diverse derivative portfolio (including nondurable and durable end uses), ethylene demand is sensitive to both economic and energy cycles. Moreover, because of its size and broad use patterns, ethylene is often used as a surrogate for the performance of the petrochemical industry as a whole.
During 2009–2014, world ethylene consumption grew at an average rate of almost 4.5% per year, while capacity increased at a slower rate of about 3.5%.
The following pie chart shows world consumption of ethylene:
Polyethylene, the largest ethylene derivative market, accounts for over 60% of global ethylene consumption in 2014. Markets include film, packaging, containers and articles for home and light industrial use. During 2014–2019, polyethylene will continue to be the largest consumer of ethylene, growing at an average rate of 4.5% per year to account for nearly 62% of the ethylene market in 2019.
The next-largest derivative market is ethylene oxide for ethylene glycol used primarily to produce PET (used in polyethylene terephthalate fibers, bottles and other goods). In 2014, ethylene oxide accounts for 15% of total world consumption. Ethylene oxide/glycol is expected to grow at about 4% per year for the next five years. China is expected to account for about 42% of the increased ethylene consumption in ethylene oxide in the next five years, illustrating the continued rapid share gain for bottle and especially traditional polyester fiber use.
Ethylene dichloride accounts for 10% of the world ethylene market in 2014. Taiwan (20%), Japan (18%), Central Europe (17%), the United States (16%) and Western Europe (13%) have the highest regional share for ethylene dichloride, while the Middle East, Southeast Asia and China are among the lowest at 3–8%. Ethylene consumption for ethylene dichloride (primarily for vinyl chloride and polyvinyl chloride resin) will grow at an average annual rate of about 3%, with the United States, the Middle East and China accounting for nearly 72% of the increased ethylene consumption.
Growth in world ethylene consumption will be driven by growth in the use of polyethylene for consumables; ethylene oxide/glycol for polyethylene terephthalate (PET) resins for PET fiber, bottles and other packaging; and ethylene dichloride for PVC plastic uses in construction and pipe. Together these end uses represent about 86% of world ethylene consumption.
Global demand for ethylene is forecast to grow faster than average world GDP growth rates over the next five years. The most important regions in terms of growth are the CIS/Baltic states (about 10% average annual growth), India (about 9.5% average annual growth), China (about 8% average annual growth), the United States (about 5% average annual growth), and the Middle East (about 4.5% average annual growth). These five regions account for 91% of the volume growth between 2014 and 2019. Western Europe is the only region expected to consume substantially less ethylene in the next five years.
Ethylene consumption is expected to grow at about 4% per year over the next five years. Capacity additions will match this growth.