Polyethylene Market Intelligence

Industry Outlook & Drivers

Global Market Outlook on Polyethylene

• The global demand is expected to grow at 3.2 percent CAGR through 2017–2022.
• Asia will remain the key demand driver with an expected growth of 4.4 percent due to the increase in per capita consumption.
• Blow molding applications and food/non-food packaging applications will be the key segments that will drive the growth across the regions.
• The major share of the global polyethylene market is from North America: 20 percent, EU: 16 percent, Asia: 39 percent, MEA: 20 percent, and LATAM: 5 percent.  
• The top polyethylene suppliers are SABIC, ExxonMobil Chemical, Dow Chemical, Sinopec, and Petrochina.
• The global polyethylene demand will grow at 3.2 percent, driven by demand from APAC.
• Polyethylene market outlook shows that films used for packaging (food and non-food) and non-packaging account for over half of the world’s PE demand.
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Demand Market Outlook

• The global PE demand is expected to grow at a 3.2 percent CAGR through 2017–2022.
• The Middle East and North America are known to be the supply surplus regions, while Asia, LATAM, and Europe are known as trade deficit regions. The trend is broadly expected to continue until 2022.

Global Market Size: PE

• The global PE market was valued at $152 billion in 2016 and is estimated to touch $190 billion by 2022, growing at a CAGR of 3.8 percent.
• Asia will likely witness a high growth rate of about 4.4 percent CAGR, followed by the Middle East, ranging from 4 to 5 percent CAGR, while saturated markets, like the US and Europe, are expected to witness a growth of about 2–3 percent CAGR during 2017–2022.
• Europe will grow at 1.2 percent during the forecast period while LATAM will see a growth rate of about 2.3 percent.

Global Capacity–Demand Analysis

• The increase in new capacities to the tune of 33-34 MMT by 2021 and modest demand growth rates of 3.2 percent CAGR are likely to keep the market well supplied.
• An increase in new capacities by over 6 MMT in China, the largest demand center, could reduce the supply-demand gap. Thereby, leaving CPG buyers with more domestic sourcing options. However, Asia would continue to be a net importer of PE.
• Likewise, an increase in new capacities in the US could lead to increased exports into LATAM, China, and African countries.

Market Outlook 

• Capacity Dynamics: The global PE production capacity is expected to increase by 33–34 MMT to touch 133 MMT by 2022, driven by the capacity additions in the US, Asia, and the Middle East.
• Production: The operating rates were expected to drop during 2016–2018 due to the increase in new capacities and marginally improve in the subsequent years.
• Demand: The global PE demand is estimated to grow at 3.2 percent, driven by blow molding and film applications in the packaging segment.

Engagement Outlook 

• The North American market is predominantly contract-based, and buyers prefer to source locally, due to the higher cost of imported PE.
• Contracts are generally renewed annually.
• In Asia, buyers engage in spot buying and source both within the region or from Europe/Asia, if arbitrage opportunities are available.
• In Europe, the buyers’ source both within the region and from Asia/Middle East. Both spot and contract prices are used.
• The suppliers are willing to enter into a contract, only if the minimum order volume is over 1,000 MT or sometimes over 2,000 MT.

Market Overview

• An abundance of low-cost ethane in the US has been driving PE capacity expansions in the US and Canada, where over 10 MMT new capacity would be online by 2021.
• Lifting of sanctions on Iran will drive new PE capacity additions in Iran.
• Due to stringent environmental regulations in China, the country has scrapped "coal to olefins plants" and has started investing in imported ethane-based crackers.
• Europe’s recycling targets: The European Union has set its targets for recycling to over 40 percent by 2025, which is expected to curb the demand for virgin PE in the market.
• Price movements of ethylene have a considerable impact on the resin production cost and margins.
• Price analysis forecasts that the American polyethylene market price was expected to decrease by 0–1 percent in Q3 2019 on a Q-o-Q basis. 
• The prices were expected to decrease by 1–2 percent on a Q-o-Q basis in Europe.

Why You Should Buy This Report

• Regional market analysis, supply-trend analysis, industry drivers and constraints, cost structure, and pricing analysis of the polyethylene market.
• Provides supplier profile and SWOT analysis of major polyethylene suppliers like Exxon Mobil, SABIC, etc. 
• It lists out the best industry practices and pricing structures.