Published May 2017
Ethylene is primarily a petrochemically derived monomer used as a feedstock in the manufacture of plastics, fibers, and other organic chemicals that are ultimately consumed in the packaging, transportation, and construction industries, as well as a multitude of industrial and consumer markets. Nondurable or consumable end uses—in particular, packaging— account for more than half of ethylene derivative consumption worldwide. One particular plastic resin, polyethylene, accounts for nearly 62% of total 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 consumption is sensitive to both economic and energy cycles. Moreover, because of its size and broad usage, ethylene is often used as a benchmark for the performance of the petrochemical industry as a whole.
During 2011–16, world ethylene consumption grew at an average rate of about 3% per year, while capacity increased at a slower rate of about 2%, leading to higher utilization rates.
The following pie chart shows world consumption of ethylene:
Polyethylene, the largest ethylene derivative market, accounted for nearly 62% of global ethylene consumption in 2016. Markets include film, packaging, containers, and articles for home and light industrial use. During 2016–21, polyethylene will continue to be the largest consumer of ethylene, growing at an average rate of 4.0% per year to account for more than 63% of the ethylene market in 2021.
The next-largest derivative market is ethylene oxide for ethylene glycol used primarily to produce polyethylene terephthalate (PET), which used in polyester fibers, bottles and polyester film. In 2016, ethylene oxide accounted for 15% of total world consumption. Ethylene oxide/glycol is expected to grow at about 2.6% per year for the next five years. The Indian Subcontinent and Southeast Asia will account for most of the growth in this market, as ethylene oxide production is expanding to feed the regions’ downstream PET and polyester fibers businesses.
Ethylene dichloride accounted for 9% of the world ethylene market in 2016. The United States (31%), Western Europe (19%), and China and Japan (9% each) have the highest regional share for ethylene dichloride. Ethylene consumption for ethylene dichloride (primarily for vinyl chloride and polyvinyl chloride resin) will grow at an average annual rate of about 2%, with the United States, the Indian Subcontinent, and the Middle East, accounting for more than 60% 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 polyester fiber, bottles, and other packaging; and ethylene dichloride for PVC uses in construction and pipe. Together these end uses represent about 72% 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 India (about 11% average annual growth), the CIS and Baltic States (about 8% average annual growth), the United States (about 5.8% average annual growth), China (about 5.6% average annual growth), and the Middle East (2.5% average annual growth). These five regions account for 89% of the volume growth between 2016 and 2021. Western Europe and Japan are expected to consume less ethylene in the next five years, as their regional markets are mature and their production is based on less-economic feedstocks (naphtha/heavy feeds), making it increasingly difficult to compete in the global ethylene derivative export market.
Ethylene consumption is expected to grow at about 3–4% per year over the next five years. Capacity additions will match this growth.