Global demand for polyethylene is expected to rise by 4% per year in the lead-up to 2018, when it will reach almost 99m t, a new study by market researcher Freedonia (Cleveland, Ohio / USA; www.freedonia.com) predicts. The gains will be driven by world economic growth, which in turn is expected to be boosted by accelerated consumer spending and an increase in manufacturing activity. Despite the growth, analyst Kent Furst notes that, “Polyethylene is a highly commoditized and mature product, and large volume new applications are unlikely to emerge in the foreseeable future. Additionally, polyethylene (like all plastics) is perceived negatively by many environmentally-minded consumers, and major polyethylene applications such as plastic bags have increasingly become subject to regulations and bans.”

The study – titled “World Polyethylene” – says, most of the gains will be the result of new ethylene feedstocks, including shale gas, coal and bio-based materials, which will give PE – including HDPE, LDPE and LLDPE – an edge either in terms of price or sustainability. In addition, ongoing development in catalyst technologies will enhance the performance, customisation and yield of PE resins, Freedonia says.

In regional terms, growth will continue to be driven mostly by Asia/Pacific, where PE demand will see the largest and steepest rise. China will be behind a lot of this increase, Freedonia says, pointing out that the People’s Republic accounted for almost one-fourth of total global PE demand in 2013. Other countries driving demand are India and Vietnam. Nevertheless, the growth momentum in this particular region is losing some of its earlier steam: whereas demand growth in Asia/Pacific averaged 8.1% in the period from 2008-2013, in the lead-up to 2018, it is expected to slow to 5.4%.

The decline can partly be explained by the fact that in the decade from 2003 to 2013, global PE production capacity shifted away from North America and western Europe to Asia/Pacific and the Middle East/Africa, thanks to lower energy and feedstock costs as well as growing demand. The shale gas revolution, however, has changed that balance, as the North American PE industry is set to make a resurgence. “Following a decade of decline, North America is expected to add more than 9m t of polyethylene capacity through 2023,” Freedonia states.

That estimate could prove conservative, a look at Plasteurope.com’s Polyglobe capacity database (www.poylglobe.net) shows. Already now, 7.5m t/y of new PE capacity are confirmed to come on stream in North America by 2019. In addition, projects worth another 4m t/y are currently in the discussion stage, and could – if approved – come on stream in 2021-22. Freedonia expects North American PE demand to grow by 2.5% in the period 2013-2018, up from just 0.9% in 2008-2013.

The loser in the equation is western Europe, although here, too, things are looking up a bit. Following a decline in PE demand of 1.5% in the period of 2008-2013, the market is expected to pick up again. Freedonia predicts that the region’s PE demand will come to 1.3% per year in the lead-up to 2018.

The study found that HDPE is the largest of all three PE resins, accounting for a bit less than half of total demand in 2013. Thanks to its increasing use in construction projects – including pipes – as well as the rise in the use of blow-moulded HDPE containers in emerging markets, this particular resin type is expected to see above average growth up to 2018.

LDPE, by contrast, will continue to lose its market share over LLDPE, as the latter is expected to see gains associated with metallocene catalyst technology that improves resin performance.

In application terms, packaging will remain the largest end-market, expected to account for most of demand in 2018. Specifically, the study found that film currently makes up half of global PE demand, and commands an even greater market share in the developing countries.