Ethylene is a gaseous alkene and an important industrial organic chemical that is primarily used in the production of polyethylene which is further processed into a wide variety of plastics, used in packaging films, plastic bottles, container liners, and grocery bags among others. The key advantages of ethylene include light weight, durability, flexibility and affordability which has led to surge in its demand from packaging industry.
The Global ethylene market is estimated to be valued at US$ 158.06 Mn in 2024 and is expected to exhibit a CAGR of 30% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the Global Ethylene are Aecom, DPR Construction, Holder Construction, Jacobs, M+W Group (Exyte), Bouygues Construction, Mercury, Arup, and Benthem Crouwel Architects. These companies are investing heavily in expanding their production facilities to meet the growing demand for ethylene and its derivatives from end-use industries. For instance, in 2022 DPR Construction completed the expansion of Braskem's ethane cracker plant in Pennsylvania, USA increasing its ethylene production capacity.
The growing packaging industry offers significant opportunities for growth in the Global Ethylene Market Size. Factors such as increasing disposable incomes, changing lifestyles and rising demand for convenience packaging from food and beverage industry are propelling the growth of packaging industry worldwide. The market for polyethylene and other ethylene derivatives is anticipated to witness high demand from packaging applications.
North America and Europe currently dominate the global ethylene market. However, Asia Pacific is expected to witness the fastest growth during the forecast period owing to rapidly expanding end-use industries and presence of emerging economies like China and India. Key players are investing heavily in capacity expansions and partnerships in Asia to leverage growth opportunities in the region. For instance, Reliance Industries is constructing the largest petrochemical complex in Jamnagar, India with planned ethylene capacity of 1.5 Mn TPA.
Market Drivers
Growing demand from packaging industry: Expanding food and beverage packaging applications is a major factor driving the growth of ethylene market. The light weight and durability properties of polyethylene make it suitable for various flexible packaging.
Increasing demand from construction industry: Ethylene is used in the production of ethylene vinyl acetate (EVA) and polyethylene terephthalate (PET), which further find applications in manufacturing pipes, sheets, bottles and containers for construction industry.
Market Restraints
Volatility in crude oil and natural gas prices: Fluctuating prices of raw materials significantly impact the production cost of ethylene. Uncertainty over crude oil and natural gas supplies poses challenges to market growth. Stringent environmental regulations: Production of ethylene involves emission of greenhouse gases. Strict regulations regarding emission control may increase compliance costs for manufacturers.
Segment Analysis
The global ethylene market is dominated by the polyethylene sub-segment. Polyethylene accounted for around 63% of the total ethylene consumption globally in 2021. Polyethylene finds wide applications in production of plastic films, bags, containers, bottles etc. With increasing population and rising demand for consumer goods packaging, the polyethylene sub-segment is expected to continue dominating the ethylene market during the forecast period. The other major sub-segments in the ethylene market include ethylene oxide, ethylene glycol, and others. Ethylene glycol finds applications in antifreeze and coolants while ethylene oxide is used in production of ethylene glycol and ethanol. These sub-segments are also expected to witness decent growth over the coming years due to increasing applications across end use industries.
Global Analysis
The Asia Pacific region dominated the global ethylene market with a share of over 50% of the total demand in 2021. China was the largest consumer as well as producer of ethylene globally. Flourishing manufacturing sector along with rapid industrialization and infrastructure development activities drove the demand for ethylene in China. North America and Western Europe were other major regions consuming ethylene worldwide. However, the ethylene market in Asia Pacific is anticipated to expand at the fastest pace during the forecast period owing to continued strong growth in the developing economies of China and India supported by burgeoning population, rising disposable incomes and growing demand for consumer goods.
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