Ethylene Market Overview
The global ethylene market size is estimated to reach US$195.3 billion by 2027
, growing at a CAGR of around 5.4%
from 2022 to 2027. The ethylene is a colorless and flammable gas that consists of double bond carbons. The ethylene has major application in the production of vinyl acetate, ethyl oxide, polyethylene
(PE), high density and low density polyethylene, and other compounds. It is used as a natural plant hormone and helps in ripening of the fruits. The inclination of ethylene for producing PE plastics, which is used in packaging industry, is creating a drive in the global ethylene market. Furthermore, rising application of ethylene in construction, packaging, agriculture, and other end-use industries is offering growth opportunities during the forecast period.
The global production shutdown and disruption in functioning due to covid outbreak impacted the global ethylene market. The restricted manufacturing activities, falling demand, logistics disruptions, and supply chain disturbances led to fall in growth for the market. The ethylene has major applications in various end-use industries such as agriculture, packaging, and construction, and others. The agriculture sector was impacted in the covid-19 outbreak. Furthermore, the lack of demand for various perishable food items affected the growth in the market. However, the packaging industry saw a growth during the covid-19 phase. The rise in polyethylene plastics for packaging of food items, consumer goods, and other items boosted the growth of packaging sector. This is due to rising demand of packaging in e-commerce, online food delivery, groceries, and others during the pandemic. According to the United States Department of Agriculture (USDA), the food away-from-home sector reached USD 76 billion in April 2021, compared to USD 36 billion in April 2020. The rise in demand for the packaging sector was primarily influenced by the growing online food delivery system and growing e-commerce sector, thereby leading to increase in applications of ethylene in the packaging industry. Thus, the global ethylene market saw a rise in demand and growth opportunities post pandemic phase.
The “Ethylene Market Report – Forecast (2022-2027)” by IndustryARC covers an in-depth analysis of the following segments of the global ethylene industry.
By Technology: Steam Cracking, Fischer-Tropsch Synthesis, Oxidative Dehydrogenation, and Others
By Feedstock: Naphtha, Propane, Butane, Ethane, and Others
By Application: Polyethylene (HDPE and LDPE), Ethylene Oxide, Ethyl Benzene, Ethylene Dichloride, Fibers, Refrigerant, and Others
By End Use Industry: Construction (Residential, Commercial, and Industrial), Automotive (Passenger and Commercial), Packaging Industry (Food Packaging, Fresh Fruits, Beverage Packaging, and Others), Agriculture, Textile, and Others
By Geography: North America (USA, Canada, and Mexico), Europe (UK, Germany, France, Italy, Netherlands, Spain, Russia, Belgium, and Rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Australia, and New Zealand, Indonesia, Taiwan, Malaysia, and Rest of APAC), South America (Brazil, Argentina, Colombia, Chile, and Rest of South America), Middle East (Saudi Arabia, UAE, Israel, Rest of the Middle East) and Africa (South Africa, Nigeria, Rest of Africa)
- The global ethylene market size will increase owing to increasing demand for ethylene in packaging, agriculture, construction, and automotive end-use industry.
- The Asia Pacific region held the largest market share in the global ethylene industry due to boosting plastic production, packaged food trends, and agriculture sector, in thereby leading to high demand of ethylene in this region.
- The oxidative dehydrogenation technology type for ethylene production is growing due to low carbon emission and cost efficiency in the market.
Figure: Asia Pacific Ethylene Market Revenue, 2021-2027 (US$ Billions)
Ethylene Market Segment Analysis – By Technology
By technology, the oxidative dehydrogenation segment held the largest global ethylene market share and is expected to grow by over 5.1% during the forecast period. The production of ethylene through steam cracking of ethane or naphtha is growing due to its lower carbon emission and low wastage of energy. Moreover, various olefin plants have switched to oxidative dehydrogenation technology for ethylene production using ethane or natural gas feedstock. For instance, Shell and Linde Engineering collaborated for the agreement on the rising ethylene production through oxidative dehydrogenation (E-ODH) technology in 2020. The cost savings and reduction in carbon emission under the oxidative dehydrogenation technology is gaining high demand for the ethylene industry. Thus, with major growth of oxidative dehydrogenation process owing to its high efficiency, less wastage, and cost benefits, the global ethylene market will grow in the coming years.
Ethylene Market Segment Analysis – By Application
By application, the polyethylene segment accounted for the largest share in the global ethylene market and is expected to grow by around 5.9% during the forecast period. The high demand of polyethylene is influenced by its increasing application in the plastics manufacturing. Furthermore, the growing use of high density polyethylene and low density polyethylene across various and used industries is offering major growth in the market. The demand of high density polyethylene (HDPE) for food packaging is increasing owing to its excellent tensile strength, durability, and non- toxic properties. According to the Indian Institute of Packaging (IIP), the packaging consumption increased from 4.3 kgs per person per annum to around 8.5 kgs per person per annum in 2019-2020. Furthermore, polyethylene is also used in the plastic manufacturing and a dominant application in food packaging, bottles, films, and others. Thus, with high demand of polyethylene plastics for various packaging applications, the global ethylene industry will rise during the forecast period.
Ethylene Market Segment Analysis – By End-Use Industry
By end-use industry, the packaging segment holds the largest global ethylene market share and will grow at a CAGR of over 6.2% during the forecast period. The growth of ethylene in packaging industry is influenced by its rising demand and application in plastic packaging forms, majorly polyethylene. The ethylene has dominant application in the packaging sector for food packaging, fresh produce packaging, and others. The use of vinyl acetate, high density polyethylene and low density polyethylene is rising in the packaging sector owing to its superior features such as extended shelf life, non-toxicity, and strength. According to the Associated Chambers of Commerce and Industry of India, the packaged food sector expected to reach USD 102 million in 2020. Moreover, the rise in application of ethylene in plastics for the packaging sector is offering major drive in the market and will boost the growth opportunities for global ethylene market in the coming years.
Ethylene Market Segment Analysis – By Geography
By geography, the Asia Pacific segment is the fastest-growing region in the global ethylene market for the year 2021 and will grow by over 35.0% during the forecast period. The global ethylene market is growing in the APAC region due to its rising demand in packaging, agriculture, construction, and other end-use industries. The growth of agriculture sector in this region is boosting the growth prospects for the ethylene market. The ethylene is a natural plant hormone and used as a ripening agent for fruits such as bananas, citrus fruits, and others. The growing agriculture harvest and production trend in countries such as India, China, and other is boosting growth of the ethylene market. According to the World Bank and OECD national data, the value added by agriculture sector in the GDP accounted to 7.6% for 2020 in China. Moreover, the ethylene has major demand for plastic packaging applications in the food sector, due to increasing growth of packaged foods in APAC. Thus, with increasing demand and production of ethylene for applications in plastics, construction, agriculture, automotive, and others in APAC, the global ethylene market will grow rapidly during the forecast period.
Ethylene Market Drivers
Growing demand from packaging and metal fabrication application
The high demand of ethylene for applications in food packaging and metal fabrication activities is driving the market. The ethylene is used in the plastic packaging applications for food, fresh produce, consumer goods, bottles, and others owing to its excellent features such as flexibility, ductility, tensile strength, and non-toxicity. The growth of packaged food items across the world is offering growth prospects for the ethylene market. According to the India Brand Equity Foundation (IBEF), the packaging sector in India is expected to reach around USD 205 billion by 2025. Furthermore, the ethylene is also used as oxy fuel gas for metal fabrication activities, metal cutting, welding, and thermal spraying. The high demand for metal processing projects and usage in automotive, aerospace, and others is offering major growth in the market. Thus, the ethylene market is driving owing to high demand from packaging and metal fabrication sectors.
Increasing usage in the agricultural sector
The demand for ethylene is rising rapidly in the agricultural sector. The ethylene is used as a ripening agent for fruits such as bananas, citrus fruits, seed germination, and others. This natural plant hormone offers maturing of the crops, ripens the fruits, and helps in the conversion of stored assets and starches into sugars. Furthermore, the growth in agricultural harvest and crop production across the globe is creating high demand for the ethylene market. According to the World Bank, the global agricultural, fishing, and forestry growth accounted to around 2.04% in 2020. Thus, the increasing productions and development in the agricultural sector is driving the market and offering growth in the global ethylene industry.
Ethylene Market Challenges
Hazardous environmental impact and strict government regulations
The ethylene has rising applications across various end use industries. However, the ethylene has major harmful effects on the environment. The ethylene oxide, which is an intermediary from the hydrohalogenation, is a harmful air pollutant and toxicant and has serious impacts on health as well. Furthermore, the stringent regulations by government for producing bio-based substitute are hindering the growth of global ethylene market. The shift towards substitutes such as bioethanol, which is derived from natural sources, is restricting the growth opportunities for the global ethylene industry. Thus, with hazardous impacts on the environment and strict regulations imposed on ethylene, the ethylene market faces major challenge.
Ethylene Industry Outlook
The global ethylene top 10 companies include:
Royal Dutch Shell
Mitsubishi Chemical Corporation
Westlake Chemical Corporation
Chevron Phillips Chemical Company
Exxon Mobil Corporation
- In October 2021, Clariant announced the use of oxidative dehydrogenation of ethane (ODG-E) for ethylene production in new plants by year 2024-25. The Clariant and Linde Engineering look forward to boost the ethylene-production with the help of ODG-E to reduce the carbon footprint.
- In July 2021, the Clariant and India Glycols Limited (IGL) announced the joint venture for producing ethylene oxide (EO) derivatives in order to provide sustainability and renewability options in market.
- In October 2019, the Sinopec and SABIC had a joint venture in order to boost the expansion and production at the Tianjin ethylene plant. This venture will uplift the production capacity to around 1.3 million tons yearly.
Report Code: CMR 0016
Report Code: CMR 36952
Report Code: CMR 0182
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