Ethylene Oxide and Ethylene Glycol Market

Updated on : August 05, 2024

Ethylene Oxide and Ethylene Glycol Market

Ethylene Oxide and Ethylene Glycol Market is valued at USD 39.7 billion in 2024 and is projected to reach USD 51.9 billion by 2029, growing at 5.5% cagr from 2024 to 2029. The demand for ethylene oxide and ethylene glycol is increasing due to their crucial roles in various industries such as automotive, textiles, packaging, and healthcare. Additionally, the growing population, urbanization, and industrialization drive the need for products made from ethylene oxide and ethylene glycol, leading to higher demand.

Attractive Opportunities in the Ethylene Oxide and Ethylene Glycol Market

Note: e-estimated p-projected.

Source: Expert Interviews, Secondary Sources, and MarketsandMarkets Analysis

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Ethylene Oxide and Ethylene Glycol Market Dynamics

Driver: Growing demand for antifreeze

Antifreeze is widely used in internal combustion engines and other heat transfer applications such as solar water heaters and HVAC (Heating, Ventilation and Air Conditioning) to prevent freezing of the coolant when the vehicle is unused in cold climates, and to prevent overheating and draw away heat from the hot engine parts during use. Antifreeze is primarily created by mixing ethylene glycol with distilled water. Strong growth is expected in countries such as China and India where increasing vehicle numbers will drive demand for the product. North America and Europe are expected to witness a very slow growth rate as these markets are mature and witnessing flat vehicle growth rate. The aftermarket for antifreeze accounts for approximately 80% of the global sales of antifreeze. The aftermarket includes workshops and automotive service centers, and the retail sector.  The remaining 20% of the sale of antifreeze goes to Original Equipment Manufacturers (OEMs) for the first fill of the vehicle. Weather is a key factor in this market as manufacturers and retailers witness growth in sales when the weather turns cold; demand for ethylene glycol antifreeze goes up during frigid weather. This factor is especially influential in markets such as North America and Europe. Thus, it is expected that the growing antifreeze market will fuel the growth of the global ethylene glycol market in the next few years.

Restraint: Geopolitical factors affecting supply chain

Geopolitical factors affecting supply chains may significantly act as a restraint in the ethylene oxide and ethylene glycol market due to their potential to disrupt the flow of raw materials, intermediate products, and finished goods across global markets. Geopolitical tensions, trade disputes, sanctions, and regulatory changes in key producing or consuming regions may lead to supply chain disruptions, delays in shipments, and uncertainty in procurement processes for ethylene oxide and ethylene glycol manufacturers. For instance, trade tensions between major economies might result in tariffs or trade barriers that affect the cost and availability of key raw materials required for ethylene oxide and ethylene glycol production. This may disrupt supply chains, increase operational costs, and create logistical challenges for manufacturers relying on international trade for sourcing inputs or exporting products. Furthermore, geopolitical instability in regions with significant ethylene oxide and ethylene glycol production capacities may impact supply chain reliability and business continuity. Political unrest, labor disputes, or regulatory changes in these regions may lead to production disruptions, supply shortages, or quality issues, affecting the overall market dynamics and pricing strategies. Moreover, changes in geopolitical alliances or policies related to energy and trade may also influence investment decisions and market dynamics within the ethylene oxide and ethylene glycol industry. Uncertainty surrounding geopolitical developments may deter investors, delay infrastructure projects, and hinder the expansion of production capacities, thereby constraining the market.

Opportunities: Growing Asia Pacific Market

Asia-Pacific has emerged as not only one of the most popular production spots but also the highest consumer of ethylene oxide and ethylene glycol. Key end-user industries such as construction, automotive, packaging, and electronics are expected to grow for the next five years in Asia-Pacific, with China, India, Thailand, and Malaysia being the most promising prospects. In addition, rapid industrialization, urbanization, and population growth in countries such as China, India, and Southeast Asian nations have fueled demand for a wide range of products that use ethylene oxide and ethylene glycol as essential ingredients.

However, the increasing disposable incomes and changing consumer lifestyles in Asia-Pacific have led to rising demand for consumer goods, including household and personal care products, where ethylene oxide derivatives play a crucial role. The shift towards premium and specialized products further enhances the demand for ethylene oxide and ethylene glycol in the region. Furthermore, the expanding manufacturing base and investments in infrastructure projects create opportunities for ethylene oxide and ethylene glycol producers to supply raw materials to a diverse range of industries. This includes the development of new production facilities, technological advancements, and collaborations with local partners to meet the growing market demands efficiently. Moreover, supportive government policies, investments in research and development, and initiatives promoting sustainability and innovation present avenues for growth and differentiation in the Asia-Pacific ethylene oxide and ethylene glycol market. Market players may capitalize on these opportunities by expanding their market presence, developing tailored products for regional markets, and establishing strategic partnerships to enhance competitiveness and market share in the dynamic Asia-Pacific region.

Challenges: Price volatility and fluctuations in raw material costs

Price volatility and fluctuations in raw material costs pose significant restraints in the ethylene oxide and ethylene glycol market, impacting production costs, profitability, and market competitiveness. Ethylene oxide and ethylene glycol production heavily rely on feedstocks such as ethylene, which is derived from crude oil or natural gas liquids. Any fluctuations in crude oil prices, geopolitical tensions, supply-demand imbalances, or unforeseen market events may lead to sudden spikes or declines in raw material costs, creating challenges for manufacturers in managing cost structures and pricing strategies. Moreover, the interconnected nature of global energy markets and the petrochemical industry amplifies the impact of price volatility on ethylene oxide and ethylene glycol markets. For instance, disruptions in oil production, changes in OPEC (Organization of the Petroleum Exporting Countries) policies, or geopolitical conflicts may trigger rapid shifts in crude oil prices, cascading down to affect ethylene and subsequently ethylene oxide and ethylene glycol prices. Furthermore, price volatility may also impact supply chain dynamics, procurement strategies, and investment decisions within the ethylene oxide and ethylene glycol industry. Manufacturers may face challenges in forecasting raw material costs, managing inventory levels, and hedging against price risks, leading to uncertainties in planning production schedules and meeting customer demands. Additionally, price volatility and fluctuations in raw material costs may influence market dynamics, competitive pressures, and profitability margins for ethylene oxide and ethylene glycol producers. In a highly price-sensitive market environment, companies may encounter difficulties in passing on increased costs to customers, balancing operational expenses, and maintaining sustainable growth strategies amidst market uncertainties.

Based on product type, ethoxylates is the fastest growing product segment in ethylene oxide and ethylene glycol market.

Ethoxylates have emerged as the fastest-growing product type in the ethylene oxide and ethylene glycol market due to their diverse applications and high demand across industries. Ethoxylates are versatile surfactants used in various products such as detergents, personal care items, agrochemicals, and industrial cleaners. Their ability to enhance the effectiveness of formulations, improve solubility, and provide excellent emulsification properties has led to increased adoption in multiple sectors. Moreover, the rising emphasis on eco-friendly and biodegradable solutions has further boosted the demand for ethoxylates, driving their significant growth in the market.

Based on application, antifreeze and coolants is the fastest growing application in the ethylene oxide and ethylene glycol market.

Antifreeze and coolants have emerged as the fastest-growing application in the ethylene oxide and ethylene glycol market due to several key factors. With the automotive industry witnessing steady growth globally, the demand for ethylene glycol-based antifreeze and coolants has surged. These products play a crucial role in maintaining engine temperature stability, preventing freezing in cold climates, and protecting against overheating in warm conditions. Additionally, advancements in automotive technology and increased vehicle production have further propelled the demand for high-quality antifreeze and coolants, driving significant growth in this application segment of the market.

Based on end-use industry, medical & pharmaceuticals is the fastest growing end-use industry in the ethylene oxide and ethylene glycol market.

The medical and pharmaceuticals industry is experiencing rapid growth in the ethylene oxide and ethylene glycol market due to several key factors. Ethylene oxide is widely used in this sector for sterilization purposes, ensuring the safety and efficacy of medical devices, equipment, and pharmaceutical products. With the increasing focus on healthcare and advancements in medical technology, the demand for ethylene oxide for sterilization applications has significantly risen. Additionally, the pharmaceutical industry's expanding research and development activities, coupled with the growing demand for healthcare products globally, further drive the demand for ethylene oxide and ethylene glycol in this sector, making it the fastest-growing end-use industry in the market.

Asia Pacific is expected to be the fastest-growing market during the forecast period.

The Asia Pacific region is experiencing rapid growth in the ethylene oxide and ethylene glycol market due to several key factors. The region's rapid industrialization, burgeoning population, and expanding middle class drive the demand for products such as textiles, automotive components, packaging materials, and pharmaceuticals, all of which heavily rely on ethylene oxide and ethylene glycol. Moreover, the availability of raw materials, competitive manufacturing costs, and favorable government policies supporting industrial growth further boost market expansion in Asia Pacific. Additionally, the region's strategic location as a global manufacturing hub attracts investments from multinational companies, fostering technological advancements and infrastructure development, thereby propelling the growth of the ethylene oxide and ethylene glycol market in Asia Pacific.

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Ethylene Oxide and Ethylene Glycol Market Players

The ethylene oxide and ethylene glycol market is dominated by a few major players that have a wide regional presence. The key players in the ethylene oxide and ethylene glycol market are as as BASF SE (Germany), SABIC (Saudi Arabia), Shell Plc (UK), Dow Chemical Company (US), ExxonMobil Corporation (US), Clariant AG (Switzerland), LyondellBasell Industries Holding B.V (US), Huntsman Corporation (US), Nippon Shokubai Co., Ltd. (Japan), INEOS Group (UK), Thermo Fisher Scientific Inc. (US), Reliance Industries Limited (India). In the last few years, the companies have adopted growth strategies such as Product launches, Investments, Acquisitions, and expansions to capture a larger share of the ethylene oxide and ethylene glycol market.

Read More: Ethylene Oxide and Ethylene Glycol Companies

Ethylene Oxide and Ethylene Glycol Market Report Scope

This report categorizes the global ethylene oxide and ethylene glycol market based on product type, application, end-use industry, and region.

On the basis of product type, the ethylene oxide and ethylene glycol market has been segmented as follows:

• Ethylene Oxide
• Ethoxylates
• Ethanolamines
• Glycol Ethers
• Others
• Ethylene Glycol
• Monoethylene Glycol
• Triethylene Glycol
• Diethylene Glycol
• Others

On the basis of application, the ethylene oxide and ethylene glycol market has been segmented as follows:

• Polyester Fibers
• Antifreeze and Coolants
• PET Resins
• Others

On the basis of end-use industry, the ethylene oxide and ethylene glycol market has been segmented as follows:

• Textile
• Packaging
• Automotive
• Chemical Manufacturing
• Medical & Pharmaceuticals
• Others

On the basis of region, the ethylene oxide and ethylene glycol market has been segmented as follows:

• Asia Pacific
• Europe
• North America
• Middle East & Africa
• South America

Recent Developments

• In December 2023, INEOS has acquired the LyondellBasell ethylene oxide and derivatives business and production facility at Bayport Texas for USD 700 Million. This deal includes the 420kt Ethylene Oxide plant, the 375kt Ethylene Glycols plant and the 165kt Glycol Ethers plant, together with all associated third-party business on the site.
• In July 2023, INEOS has signed a deal to acquire TotalEnergies’ 50% share of Naphtachimie (720 ktpa steam cracker), Appryl (300 ktpa polypropylene business), Gexaro (270 ktpa aromatics business) and 3TC  (naphtha storage), which are all currently joint ventures between the two companies. A number of other infrastructure assets are also contained in the deal including part of TotalEnergies ethylene pipeline network in France.
• In July 2023, LyondellBasell has completed the acquisition of Mepol Group, a manufacturer of recycled, high-performing technical compounds located in Italy and Poland. Mepol S.r.l. and its subsidiaries Polar S.r.l. and Industrial Technology Investments Poland Sp.z.o.o, will be subsidiaries in LyondellBasell's Advanced Polymer Solutions (APS) business unit. This acquisition also strengthens the I&D business unit of LyondellBasell through which it offers ethylene glycol and ethylene oxide.
• In December 2022, Clariant is set to expand its Care Chemicals facility in Daya Bay, Huizhou, China, to boost its support for pharmaceutical, personal care, home care, and industrial application customers. The CHF 80 million investment will see capacity increases for existing products as well as the introduction of new products by the end of 2024. By successfully obtaining the drug GMP certificate, the Clariant Daya Bay manufacturing site has become the first API manufacturer in China with certified polyethylene glycol Polyglykol 3350.
• In July 2021, Clariant, a focused, sustainable, and innovative specialty chemical company, and India Glycols Limited (IGL), a leading company in the manufacturing of green technology-based chemicals, today announced the successful creation of their 51-49% joint venture for renewable ethylene oxide (EO) derivatives after receiving all necessary regulatory approvals. The joint venture will operate under the name Clariant IGL Specialty Chemicals Private Limited.

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