2017 Global Ethylene Supply Pattern

In 2017, the global ethylene capacity kept going up. The ethane cracking projects in the Middle East, China and North America contributed the most. Meanwhile, most capacity expansion plans also concentrate in these areas in next 3-5 years. Under the background of low crude oil prices, naphtha cracking is still the major technology producing ethylene globally. In the long run, the ethane cracking industry in North America may boost the new energy revolution in the ethylene industry and will make up the majority of new ethylene projects. Besides, some outdated units are closed down worldwide, especially in Asia. But compared with the newly-added capacity, the eliminated capacity only occupies a small part.

The global capacity was around 170 million mt/a, up 4.8% Y-O-Y. The output was 150 million mt, up 3.5% Y-O-Y. Operating rates remained high, boosted by the stable and high demand from the downstream market as well as low feedstock prices. The overall operating rate was around 88% in 2017, slightly dropping Y-O-Y. The main reason for the decrease was that some newly-added units went into production in H2 of 2017 and the output was not fully released. SCI’s study shows that operating rates of most ethylene units were over 90%, and some even reached 100%-120%.

2017 Global Ethylene Unit Status

Remarks: TA = turnaround, SD = shutdown; the above units under maintenance mainly locate in Asia.

In H1 of 2017, most Asian ethylene units underwent maintenance in March-April. Asian ethylene prices soared, boosted by the speculation sentiment. In H2 of 2017, maintenance concentrated in July-August. Meanwhile, many cracking units were shut down because of the hurricane in the U.S. Thus, global ethylene prices were pushed up. Overall, maintenance was the main reason for the high ethylene prices worldwide.