JEDDAH: Global ethylene oxide (EO) market is forecast to exceed 27 million tons by 2017, as it is the second leading consumer of ethylene globally, the "Ethylene Oxide: A Global Strategic Business Report" announced by Global Industry Analysts Inc., said Monday. The compound also known as oxirane or epoxyethane, is a combustible colorless gas with slightly sweet odor. Ethylene oxide is usually handled and delivered in the form of a refrigerated liquid. Almost 76 percent of EO is transformed into glycols, predominantly monoethylene glycol (MEG). Current research and development initiatives in the market are focused on manufacturing process efficiency, equipment design and catalysts used in production. Ethylene oxide market witnessed a rebound in demand in 2010 with growth mainly stemming from MEG and surfactants markets. Middle East represents the next fastest growing market over the analysis period. China is at the forefront in the worldwide consumption of ethylene oxide. The country is expected to witness a robust growth in demand as well as production of EO over the next few years driven by rapid development of the surfactants and polyester sectors. North America, Japan and Europe are losing ground in worldwide consumption of EO. North American market for MEG used in polyethylene terephthalate (PET) resins and containers is already showing signs of maturity, predominantly because of the constant lightweighting of the plastic bottles in the region that reduces the quantity of PET. Currently, Asia-Pacific and Middle East comprise the hotbeds for setting up EO plants. The regions are witnessing a rapid increase in EO capacity over the ensuing year across China, Saudi Arabia, and India. On the other hand North America and Europe are expected to register contraction in EO capacity as the significant increase in number of EO plants in Middle East and Asia is displacing the capacity in mature markets. Majority of the new capacity is expected to come from the Middle East with production of EG centered at a number of supersites. The market for ethylene oxide is fragmented with top 20 players accounting for about 65 percent of the market. Majority of the manufacturers are forward integrated towards manufacture of ethylene glycol. Select major players profiled in the report include BASF SE, Clariant International, The Dow Chemical Company, Huntsman Corporation, INEOS Group Holdings PLC, LyondellBasell Industries, Old World Industries, Reliance Industries Limited, Saudi Basic Industries Corporation, Shell Group, among others. However, demand recovery in the short term is expected to be restricted to previously attained highs in demand levels from where the market started witnessing a downfall. Though the MEG market is expected to face oversupply conditions due to new capacities in the Middle East, strong demand from the Asian markets has resulted in absorbing the excess production. In Europe, supply conditions continue to remain tight due to plant closures with the operating rate at the existing units increasing to 85-90 percent. Asia-Pacific represents the largest market for EO, a new market research report on ethylene oxide noted. The region also represents the fastest growing market at a CAGR of more than 6.0 percent over the analysis period, driven by rapid increase in the demand for polyester fibers.
