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Forecast of Global Supply and Demand Trends for Petrochemical Products (for the period 2005 to 2018)

The Study Group on Global Supply and Demand Trends for Petrochemical Products (secretariat: Chemicals Division, Manufacturing Industries Bureau, Ministry of Economy, Trade and Industry) has completed a study on trends up to the year 2018 in global demand and supply of petrochemical products, such as ethylene derivatives, propylene derivatives, and aromatic products (demand and production capacity, and volume).

Outline

Supply and demand trends prepared this year are forecasted as follows, concerning trends in the coal chemical industry in China, the possible influence of the shale gas revolution in the U.S., and trends in domestic demand in China, which will cause a huge impact on global supply and demand.

  1. The production capacity of ethylene in China is expected to increase by nearly 10% from the forecasted amount of the previous year's report due to the country’s advancement in building new coal chemical plants, approaching the volume of 30 million tons or more by 2017.
  2. Concerning the production capacity of ethylene in the U.S., plans for new and additional facilities are presumed to be developed by 2018, in which more than 10 million tons of ethylene are expected to be produced, and the production will continue to increase after 2018. However, there are signs that these plans will be postponed due to the surge in construction costs and changes in the export environment.
  3. Concerning the ratios of increase in global demand, the year-on-year average of ethylene derivatives is 4.2%, while that of propylene derivatives is 4.0%. China and India are expected to lead the increase in the global demand in 2014. However, it is also anticipated that the demand increase will remain small if the countries’ rate of economic growth slows down.

Based on these facts, regarding the supply-demand balance of ethylene derivatives, excess supply peaked in 2011 (about 5.7 million tons). Thereafter, supply and demand moved toward equilibrium according to the increase in demand in China, India, and other countries in Latin America. However, the excess supply situation pervaded again after 2014, and it is expected that the excess supply will increase to nearly 5.5 million tons by 2015. Concerning the future supply-demand balance of propylene derivatives, there will be a high increase in demand in China, India and other countries, but the production capacity in Asia and the Middle East will continue to increase, expecting that the excess supply conditions will persist while peaking in 2015 (about 7 million tons).

Concerning the future supply-demand balance of petrochemical products, it should be noted that excess supply is expected to increase in the long term, while the situation may change according to future world economic trends and plant expansions.

Reference: The Study Group on Global Supply and Demand Trends for Petrochemical Products

  1. In the midst of the changing environment surrounding domestic petrochemical industries, Japan should properly examine and analyze supply and demand trends for petrochemical products inside and outside Japan, leading to the study of business management, policies and other factors focusing on the global environment. From this viewpoint, the Ministry of Economy, Trade and Industry (METI) created the "Study Group on Global Supply and Demand Trends for Petrochemical Products" in 1997 (secretariat: Chemicals Division, Manufacturing Industries Bureau, METI; members: people involved in petrochemical industries, finance, trading companies and other areas).
  2. The study group has created a working group exclusively for reviewing and collecting data on forecasts of petrochemical product supply and demand trends, plant operations, and other issues inside and outside Japan for the purpose of creating a report on expected global supply and demand trends for petrochemical products until 2018, including demand, production capacity and production amount.

For further details, see the Japanese language press release.

Release Date

June 13, 2014

Division in Charge

Chemicals Division, Manufacturing Industries Bureau

Ministry of Economy, Trade and Industry
1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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