Ethylene Market Trends

Growth Drivers

• Surging demand for polyethylene in packaging: Ethylene is a widely used feedstock in the production of polyethylene, and the surging demand for polyethylene in packaging is significantly fuelling the market growth.  The key characteristics of polyethylene, including versatility, durability, resistance to chemicals, impact, and bacteria, and low capacity for moisture absorption, also fuel polyethylene’s demand in packaging. As a result, companies have started to invest in the production of polyethylene. For instance, in March 2025, Borealis announced the launch of Borcycle M CWT120CL, a recycled linear polyethylene with low density and designed for flexible packaging applications for non-food items.
• Growing construction and infrastructure activities: The demand for ethylene-derived products is rapidly increasing due to the rise of urbanization, the initiation of smart city programs, the construction of large-scale housing in the emerging economies, and the expansion of infrastructural development. Particularly, the demand for products, such as polyethylene and PVC, is increasing for insulation, pipeline, and structural purposes.  In October 2024, a panel discussion was hosted by the Public-Private Infrastructure Advisory Facility (PPIAF) at the World Bank Headquarters Main Complex 4-800 with the motive of scaling up sustainable infrastructure. The focus of the discussion at the event was on the role that the pooled infrastructure investment vehicles play in attracting private financing for projects related to climate and infrastructure.
• Automotive light-weighting initiatives: The demand for ethylene-derived polymers such as polyethylene and ethylene‑propylene diene monomer (EPDM) is significantly driven by automotive light-weighting initiatives that are aimed at reducing the mass of vehicles. In July 2024. Dow announced the launch of NORDEL REN EPDM at DKT 2024. It is a bio-based and high-performance elastomer, which has been designed for weather seals and hoses in the automotive industry. In addition, the need for increasing fuel efficiency, which is met by automotive light-weighting initiatives, also accelerates the consumption of ethylene.

Challenges

• Volatility in feedstock prices: Ethane, naphtha, butane, and propane are some feedstocks used in the production of ethylene, and the volatility in the prices of such feedstocks significantly hampers the market growth, thereby exerting upward pressure on the prices of ethylene. Due to unprecedented volatility in the prices of crude oil, the prices of feedstocks required for ethylene production have been fluctuating. The upward pressure on the prices of ethylene can hamper the adoption of ethylene for price-sensitive consumers.
• High capital investments: High capital investment is required for the production of ethylene, since facilities for ethylene-based petrochemicals are supposed to be large and complex, and must encompass sophisticated operational units and processing conditions. This can be a key restraint for small-scale ethylene producers.