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Asia Pacific Region will Continue to Dominate the Ethylene Market
Olefi ns are the major building blocks of the petrochemical industry. Ethylene, Propylene, Styrene and Butadiene demand is based on the downstream projects being set up. During the 11th plan period, the demand for olefi ns was up my a million MTA from 5.3 MMT to 6.4 MMT.

India significantly increased its olefins capacity in recent few years. By increasing their capacities, GAIL and HPL, and with its startup IOC, have contributed to the overall growth of Ethylene capacity in the country.

"There are several elements that hamper or support the growth of any industry in any country. As more and more investment is predicted in chemical and petrochemical industry in near future, India will continue to grow," said Makarand Dixit, Head Marketing - Petrochemicals, ONGC Petro Addition Limited (OPaL), during his presentation at ChemPetro World Conference 2013. OPaL is a joint venture company promoted by ONGC, GAIL and GSPC. The company with an investment of USD 4 Billion (Rs 21400 Cr. approx.) is setting up a green field petrochemical complex in Dahej SEZ, PCPIR; OPaL being the anchor tenant.

Ethylene: Rapid growth in India
In 2012, India accounted for nearly ten percent of global ethylene production. According to Research and Markets, Ethylene is one such multiple application organic compound which is seeing rapid growth in India. Asia Pacific accounted for nearly 50 per cent of the global demand value of 91 billion in 2010, and India accounted for nearly 9 per cent of the total ethylene capacity in Asia Pacific.

"The leading players in the Indian ethylene industry in 2010 were Reliance Industries, Indian Oil Corporation, Haldia Petrochemicals, and GAIL India Limited.

With the Indian ethylene plant capacity crossing 4 MMTPA in the year 2010, the Indian ethylene industry faced tough competition from neighbor China, which is the leader in the Asia Pacific ethylene market," the report states.

China
Giving an insight into the global capacity expansion during 2012 to 2017, Dixit presented that total 33 MTPA capacity to be added by 2017. North America, ME & Iran, and Saudi & UAE are also expected to add 3.5 MTPA in 2016/2017, 2.5 MTPA and 1.7 & 1.5 MTPA respectively by 2017. „China will lead the growth with 13.7 MTPA, and CTO expected to add 3.5 MTPA in Chinese Ethylene capacity by 2015," he added. Further, according to the China Petroleum and Chemical Industry Association (CPCIA), although China's ethylene capacity will register substantial growth during the government's 12th Five-Year Plan - from 2011-2015 - domestic output still cannot meet downstream demand. China's ethylene self-sufficiency rate is only expected to increase from 56 per cent in 2010 to 62 per cent by 2020. Some major plants have already started up in the latter half of 2012.

Middle East
Dixit analysed that more than 6 MTPA of capacity (1/5th of global capacity addition) is likely to be added in ME alone. Middle East has plentiful feedstock and this is the main reason for the considerable growth of ethylene market in the region. "By 2020, ME expected to be 1/4th of the global capacity of which ethane based capacity is expected to be only 16 per cent of the global capacity. Reports are that new projects are based on mixed feeds (ethane and LPG) and Naphtha cracker signaling a shift," he added.

Puneet Puri, Business Development Executive, Lummus Technology Inc. also added, "Ethylene market is definitely healthy. There is capacity in the Middle East and the United States. By 2015- 2016, we will see maximum capacity utilisation of these crackers." However, even in this healthy ethylene market, the co-products are not keeping pace at all, Puri said.

The Asia-Pacific region will continue to dominate the ethylene market in the future and generate more than a third of the worldwide demand.

According to Dixit, a healthy demand in Asia will drive the growth of Ethylene market in the region, and it will result in large capacity increase in NE Asia.