GLOBAL ETHYLENE MARKET ANALYSIS

Global Ethylene MarketSize and Trends

The global ethylene market size is expected to reach US$ 342.94 Bn by 2031, from US$ 220.10 Bn in 2023, exhibiting a CAGR of 5.7% during the forecast period.

Global Ethylene Market Trends:

Rise in offshore ethylene production facilities: Rise in offshore ethylene production facilities significantly influence the global ethylene market. In the past decade, several companies have invested billions of dollars to build large scale crackers and production units in coastal regions across Asia Pacific, Middle East, and Africa to take advantage of the low costs offshore.

This shift is allowing producers to access growing markets for ethylene and its derivative products in these regions in a more cost-effective manner.

Having production located closer to the end-use markets reduces transportation costs substantially. It also minimizes dependency on imports and supply chain disruptions. For example, Reliance Industries has set up the world's largest refinery and petrochemicals complex at Jamnagar in India, which consists of petroleum refining and petrochemicals plants. The ethylene cracker here has a capacity of 1.6 million tons per year.

Reliance Industries Limited is an India-based multinational conglomerate with headquarters in Mumbai, India. The company operates in various industries, including energy, petrochemicals, natural gas, retail, telecommunications, and textiles. It is the largest public company in India by market capitalization and revenue, and the 100th largest company worldwide. Reliance Industries has a significant presence in the petrochemical sector, with a focus on petroleum refining and marketing, as well as the production of petrochemicals.

The offshore production trend is also driven by abundant availability of natural gas feedstock and relaxed environmental regulations in these regions compared to developed markets in Europe and North America. Natural gas-based steam cracking requires lower capital and production costs in areas with lower gas prices. According to the USEIA, the average wellhead price of natural gas in the U.S. was US$ 4.91 per million British thermal units in 2021, while many Middle Eastern and Asian countries have much lower domestic gas prices. The lower fixed and variable costs allow offshore producers to be more competitive on delivered product costs even after accounting for transportation.

Growth in polymer cracker capacity additions: The recent additions in polymer cracker capacity across major economies is significantly influencing the global ethylene market dynamics. Countries like the U.S., China, Japan, South Korea, India, and others are heavily investing in expanding their existing cracker facilities as well as setting up new Greenfield Projects. This is being driven by robust demand prospects of downstream polymer products particularly polyethylene and polypropylene. The surge in cracker capacities enables petrochemical companies to boost ethylene volumes for in-house downstream units as well as sell surplus ethylene in spot markets. For instance, as per the U.S. Energy Information Administration stats, ethylene trade volumes between the U.S., Europe, and Asia Pacific increased by 12% in 2020 compared to the previous year indicating robust demand. This has put upward pressure on ethylene prices in key import regions.