The Pandemic and the Green Line Regulation to Accelerate Growth of the Ethylene Glycol Market

IndexBox has just published a new report: 'World - Ethylene Glycol (Ethanediol) - Market Analysis, Forecast, Size, Trends, and Insights'. Here is a summary of the report's key findings.

Increasing demand for PET packaging and urgent need for eco-friendly refrigerants to become the main drivers of the ethylene glycol market growth.

Key Trends and Insights

The sharply increased global demand for PET packaging, containers, and nonwovens for personal protective goods is set to stimulate the ethylene glycol market. Monoethylene glycol is a major type of ethylene glycol produced worldwide, constituting a raw material for the production of polyethylene terephthalate (PET) used in synthetic fibers, packaging, plastic tableware, etc.

Amid tightening environmental regulation and the EU's policy to replace HFC fluids with climate-friendly alternatives, ethylene glycol fluids meet environmental requirements and provide energy savings, which may promote the use of ethylene glycol in cooling systems.

China remains the largest consumer of ethylene glycol, with domestic manufacturing expanding rapidly over the last decade. China's booming and government-subsidized electric vehicle industry could expand the demand for polyethylene glycols as automotive antifreeze and PET feedstock for automotive parts.

In early 2021, as a result of a winter storm in the United States, near 85% of ethylene glycol production capacity was stopped. The decline in output led to an increase in import prices for ethylene glycols in Asia.

Saudi Arabia to Remain the Key Producer and Exporter of Ethylene Glycol

Saudi Arabia (7.1M tonnes) remains the largest ethylene glycol producing country worldwide, comprising approx. 26% of the total volume. Moreover, ethylene glycol production in Saudi Arabia exceeded the figures recorded by the second-largest producer, the U.S. (2.6M tonnes), threefold. The third position in this ranking was occupied by Canada (1.9M tonnes), with a 6.9% share (IndexBox estimates).

From 2012 to 2019, the average annual growth rate in Saudi Arabia stood at +7.3%. The average annual rates were as follows in other countries: the U.S. (+6.4% per year) and Canada (+2.1% per year).

In 2019, shipments abroad of ethylene glycol (ethanediol) increased by 5.8% to 16M tonnes, rising for the fifth consecutive year after two years of decline. In general, total exports indicated tangible growth from 2012 to 2019: its volume increased at an average annual rate of +3.9% over the last seven years. 

In value terms, ethylene glycol exports shrank significantly to $10B (IndexBox estimates) in 2019. Overall, exports continue to indicate a noticeable slump. The pace of growth appeared the most rapid in 2017, with an increase of 33% against the previous year. Over the period under review, global exports attained the peak figure at $13.9B in 2018 and then contracted sharply in the following year.

Saudi Arabia represented the key exporter of ethylene glycol (ethanediol) globally, with the volume of exports finishing at 6.7M tonnes, which was near 41% of total exports in 2019. Canada (1.5M tonnes) ranks second in terms of total exports with a 9.5% share, followed by Taiwan (Chinese) (8.9%), Kuwait (8.3%), the U.S. (6.3%), and Singapore (5.8%). Belgium (681K tonnes) occupied a relatively small share of total exports.

From 2012 to 2019, the average annual growth rates concerning ethylene glycol exports from Saudi Arabia stood at +7.5%. At the same time, the U.S. (+9.2%), Kuwait (+5.1%), Taiwan (Chinese) (+2.3%), and Canada (+2.0%) displayed positive paces of growth. Moreover, the U.S. emerged as the fastest-growing exporter globally, with a CAGR of +9.2% from 2012-2019. By contrast, Singapore (-2.3%) and Belgium (-4.4%) illustrated a downward trend over the same period. Saudi Arabia (+8.8 p.p.) and the U.S. (+1.8 p.p.) significantly strengthened their global export positions, while Singapore and Belgium saw their share reduced by -3.2% and -3.3% from 2012 to 2019, respectively. The shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, Saudi Arabia ($4.2B) remains the largest ethylene glycol supplier worldwide, comprising 42% of global exports. The second position in the ranking was occupied by Canada ($908M), with a 9.1% share of global exports. It was followed by Taiwan (Chinese), with an 8.3% share.

Source: IndexBox Platform