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Polyethylene Demand to Increase


The plastic resin industry is preparing for a surge in orders, as The Freedonia Group - USA- found the demand for polyethylene will increase in the coming years.
Freedonia studies the plastic industries throughout 27 countries, analyzing key market players, demand and the production capacity. It stated in its latest report polyethylene is the most commonly used plastic resin in the world, and demand for it will rise 4 percent each year through 2018, bringing demand for the product up to 99.6 million metric tons in the next three years.

Regional Demand

Freedonia found the Asia/Pacific region is the largest and most rapidly growing market for polyethylene in the next three years. China, in particular, has a high demand for the plastic resin, but Vietnam's and India's polyethylene markets are expanding at the fastest pace within the region.

Reasons Driving the Need

The demand for polyethylene comes from increased manufacturing activity and rebounding consumer spending around the globe, according to Freedonia. These positive macroeconomic factors are driving the need for plastics worldwide. Additionally, cheaper crude oil prices and improved employment in the U.S. are driving demand for plastic packaging within the nation, Zacks Equity Research stated. The effect of oil prices on the situation is twofold. First, lower oil prices drop costs of plastics manufacturers and second, lower prices at the pump mean consumers have more disposable income to spend on products.

Meeting the Demand

Falling crude oil prices will help manufacturers meet the demand for plastics, and new technologies will specifically aid in meeting the need for polyethylene. New methods of creating polyethylene from shale gas, coal and bio-based resources have been discovered, which means production of the resin is sustainable over the coming years. The greater variety of production methods will also decrease the cost of the resin, retaining its competitive advantage over other plastic resins.


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