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Forecast of Global Supply and Demand Trends for Petrochemical Products (for the period 2006 to 2019)

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 2019 in global demand for and supply of petrochemical products, such as ethylene derivatives, propylene derivatives, and aromatic products (demand and production capacity, and volume).

1. Trends in the coal chemical industry in China

  1. Regarding coal chemical projects, it is expected that 11 projects (equivalent to three million tons of ethylene) out of the nearly 50 projects (equivalent to 17 million tons of ethylene) that have already been publicized will be started by the end of 2016. However, it is difficult to predict how many projects will be actually carried out from 2017 due to indications of a plunge in oil prices and the strengthening of environmental regulations in China.
  2. The production capacity for ethylene in China is expected to increase to 30 million tons (in 2019) from 19 million tons (in 2013) through the plans to accelerate to construct new and additional facilities including naphtha crackers, based on the government’s policy that aims to improve self-sufficiency in ethylene.
  3. Concerning propylene, the government of China has rapidly developed propane dehydrogenation (PDH) because there is the prospect that liquefied petroleum gas (LPG) prices will remain low for the long term. The production capacity for propylene including MTP, or methanol to propylene, is expected to increase to 37 million tons (in 2019) from 20 million tons (in 2013).

2. Possible influence of the shale gas revolution in the U.S.

  1. Projects for new and additional facilities to produce ethylene derived from shale gas have been affected by the decrease in shale gas’s advantages due to the decrease in oil prices and the rise in construction costs. However, shale gas still has an absolute price advantage over naphtha.
  2. For some plants, the start-up dates have been delayed by about a year, but the production capacity for ethylene is expected to exceed 10 million tons at its peak in 2017 or 2018. As a result, the production capacity for ethylene will increase to 38 million tons (in 2019) from 28 million tons (in 2013).

3. Global demand

  1. Concerning the growth rate of global demand, the CAGR (compound average growth rate) for ethylene derivatives from 2013 to 2019 is expected to be 3.5% (that from 2006 to 2013 was 2.6%).
  2. The CAGR (compound average growth rate) for propylene derivatives from 2013 to 2019 is expected to be 4.2% (that from 2006 to 2013 was 3.0%). Asia is expected to continue driving the increase in global demand. However, the increase in demand might remain small if those countries’ rate of economic growth shows downward trends.

4. Supply-demand balance for each petrochemical product

  1. Regarding the supply-demand balance for ethylene derivatives, in China, the production capacity for ethylene derivatives is expected to increase as the petrochemical industry grows. However, demand is anticipated to increase more rapidly than production, and consequently the excess demand is expected to reach 17 million tons by 2019 (16 million tons in 2013). On the other hand, in the Middle East, it is expected that the excess supply of ethylene derivatives will reach 19 million tons by 2019 because of growth in production (15 million tons in 2013). In North America, the excess supply of ethylene derivatives is expected to reach 8.3 million tons in 2019 (7.5 million tons in 2013).
  2. Regarding the supply-demand balance for propylene derivatives in China, after the excess demand for propylene derivatives reached 6.4 million tons in 2013, the excess demand is expected to decrease to 3.2 million tons in 2019 because of progress in PDH projects and other activities.

Note: Concerning the future supply-demand balance for petrochemical products, it should be noted that the situation may change according to future world economic trends and increases in the number of plants.

Release date

June 12, 2015

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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