Ethylene & Propylene Market – Insights
Ethylene & propylene are the major raw materials which are used in manufacturing a large amount of derivatives such as polyethylene, polypropylene, ethylene dichloride, cumene, and ethyl benzene. These derivatives are used by numerous end-use industries including packaging, coatings and paints etc.
Among derivate types, the ethylene segment accounted for the largest market share in 2018. Among all types of ethylene, ethylene oxide sub-segment is expected to register the highest CAGR. Ethylene oxide is mainly used for production of monoethylene glycol, diethylene glycol, and triethylene glycol. Furthermore, it is also used in production of derivatives such as ethanolamine, ethoxylates, polyethylene glycol, glycol ethers, and polyether polyols. Furthermore, the polypropylene sub-segment is expected to register the highest CAGR over the forecast period in the propylene segment. Polypropylene is majorly used for film extrusion, and finds application in flexible and rigid packaging. Major application of these films is in packaging of food & beverage products. Other applications of polypropylene are in the manufacture of automotive interiors, consumer products, fabrics, and biaxially oriented polypropylene (BOPP) films. The growth of the food & beverage industry is expected to drive demand for flexible packaging, which in turn is projected to facilitate growth of the polypropylene segment over the forecast period.
Among application, the pharmaceuticals segment accounted for significant market share in the global Ethylene & Propylene Market in 2018, and is expected to register significant growth during 2019- 2027. Ethylene derivatives such as ethylene oxide are used to sterilize medical equipment and pharmaceutical products that cannot support high steam sterilization procedures, and other healthcare supplies such as ointments and bandages in order to reduce potential damage to products. It is also used as a disinfectant and fumigant. Due to increasing demand for ethylene oxide for production of commercially important derivatives, several market players are adopting strategies such as capacity expansions, and mergers and acquisitions, which is aiding growth of the pharmaceutical application segment.
Additionally, technologies such as Methanol-to-Olefins and coal to olefins (CTO) are being developed by market players in order to reduce production cost of ethylene & propylene. For instance, McDermott International, Inc. offers Lummus Technology's Light Olefins Recovery Technology which recovers ethylene and propylene that are produced in a Methanol-to-Olefins (MTO) process. This technology offers benefits such as high product recovery, low energy consumption and capital costs.
However, the introduction of stringent government regulations on the use of plastic manufactured by use of these polymers is expected to restrain growth of the market.
The global ethylene & propylene market was valued at US$ 325,264.5 million in 2018, and is expected to register a CAGR of 5.5 % in terms of revenue over the forecast period (2019 – 2027), to reach US$ 520,251.9 million by 2027.
Figure 1. Global Ethylene & Propylene Market Share, By Region, 2018
Source: Coherent Market Insights, 2018-19
Asia Pacific accounted for significant market share in the global ethylene & propylene market in 2018, and is expected to witness significant growth over the forecast period. This is owing to increasing demand for ethylene & propylene derivatives by various end-use industries such as automobile and packaging. This, in turn, has led companies in the region to invest in expanding the capacity of ethylene & propylene production plants. For instance, in 2015, in India, ethylene capacity expansion from 1.9 MMT to 3.2 MMT was planned by Reliance Industries in Jamnagar 3 project.
Figure 2. Global Ethylene & Propylene Market Share, By Applications, 2018
Source: Coherent Market Insights, 2018-19
Companies are also adopting collaboration strategies with the objective of strengthening their market position and expanding their consumer base in the global market. For instance, in 2017, SABIC and ExxonMobil Chemical Company collaborated with the goal to invest in plants containing ethane steam crackers with an annual production capacity of 1.8 million tons of ethylene.
Major players operating in the global ethylene & propylene market include Exxon Mobil Corporation, Saudi Basic Industries Corporation, Royal Dutch Shell Plc., China Petroleum & Chemical Corporation, Chevron Phillips Chemical Company LLC, Total S.A., LyondellBasell Industries N.V., National Petrochemical Company, INEOS Group, and Dow Inc. among others.
Ethylene is a hydrocarbon, which exists in the form of colorless flammable gas and has a faint sweet and musky odor when pure. Ethylene is used extensively in the chemical industry. Ethylene is also a natural plant hormone, and is used in the agriculture sector for ripening of fruits. Propylene is a colorless fuel gas with a naturally pungent smell. Propylene is obtained during the refining of gasoline and is flammable and non-toxic.
Among applications, the chemicals and petrochemicals segment holds the largest share in the global ethylene & propylene market. Ethylene is used in the production of vinyl chloride which is used for producing polyvinyl chloride (PVC). Furthermore, propylene can be polymerized to form polypropylene polymers which are widely used in the packaging industry. These factors are driving growth of the chemicals & petrochemicals segment. Propylene is also used as a raw material for producing cumene value chain, propylene oxide, n-butyl alcohol, acrylonitrile, acrylic acid and others, which is aiding growth of the chemicals and petrochemicals segment.
Among regions, Asia Pacific accounted for a significant market share in 2018, owing to increasing demand of ethylene and propylene from industries such as automobiles, construction, packaging, and consumer products in emerging economies such as India and China. These factors are driving demand for ethylene and propylene derived plastic polymers such as polyvinyl chloride, polyethylene, polystyrene, polyethylene terephthalate, and polypropylene. According to the American Institute of Chemical Engineers (AICHE), the polymer market in India is driven by demand for polypropylene and polyethylene which represented 73% of all the commodity resin consumed in 2015 to 2016.
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“*” marked represents similar segmentation in other categories in the respective section.
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