Polyethylene Market

Market Overview

The global Polyethylene market size was valued at USD 119.20 billion in 2023 and is projected to reach a value of USD 157.76 billion by 2031, registering a CAGR of 4.4% during the forecast period 2023-2031.

Polyethylene (P.E.) is a versatile material widely used in construction and packaging. For products at a lower cost, this polymer offers decreased weight, high flexibility, excellent chemical resistance, good electrical treeing resistance, and increased impact strength. It is the most widely used polymer in the world and is found in various products, including grocery bags, food wrappers, detergent bottles, and fuel tanks for cars. For instance, Merck KGaA creates BRAND wide-mouth bottles from this polymer, and A-Pac Manufacturing Co., Inc. creates bags. Additionally, during the anticipated timeframe, market growth is anticipated to be aided by rising industrialization, rising demand for bio-based polyurethane, and rapid growth of the packaging sector.

 Polyethylene is the world's most-used plastic, derived from natural gas and crude oil. Plastic is extensively used by several processing industries, such as automotive, pharmaceutical, packaging, and electronics. It is a potential source of high-strength and chemical-resistant material with flexibility, low moisture absorption ability, and waterproofing. 

 As recorded by Plastics Europe, global plastic production increased from 348 million tons to 360 million tons in 2018, of which polyethylene accounted for about 80 million tons. The development of abrasion-resistant plastic and its applications in bulletproof vests and artificial joints drives the market growth. New international trade pacts, such as the ASEAN Federation of Plastics Industries (AFPI), the Philippines Plastics Industry Association (PPIA), and the Thai Plastic Industries Association (TPIA), provide Impetus to market growth.

Market Dynamics

Market Drivers

Smart Packaging 

Changing consumer preference is surging the demand for on-the-go and safe packaged food across the globe. Polyethylene has gained traction in innovative packaging due to its durability, flexibility, and sustainability. It is widely used in manufacturing films for food packaging (frozen, dry goods, etc.) as a moisture scavenger, antimicrobial, odor removal, and temperature control.

Rising Adoption of Electric Vehicles 

Stringent government regulation guarding the automotive industry has compelled manufacturers to shift towards electric and hybrid vehicles to curb CO2 emissions. Polyethylene exhibits properties such as high impact resilience, low density, and solid durability, making it ideal for manufacturing glass-reinforce car bodies and electrical insulation. The market has witnessed a significant surge in demand for lightweight components and auto parts, especially for electric vehicles. In 2018, around 3.29 million electric vehicles were sold across the globe. Thus, polyethylene is a cost-effective solution for O.E.M.s.

Market Restraints

Global Product Adoption is Limited by the Existence of Substitutes, Including PU and P.E.T. Products

The market's growth is threatened by the accessibility of substitute goods like polypropylene and polyethylene terephthalate (P.E.T.). These plastic types exhibit characteristics similar to P.E., such as impact resistance, chemical resistance, flexibility, moldability, and low cost, which is anticipated to restrain the market's expansion. Additionally, due to altering the cost structure of the finished product, fluctuating raw material prices could limit market expansion.

Market Opportunity

Players in the market are adopting more and more strategies.

There are numerous market participants in the fragmented polyethylene industry. The key market players are constantly pursuing various development strategies to obtain a competitive edge, increase market share, and seize market opportunities. For instance, U.P.M. Raflatac introduced a new range of Forest Film products in May 2020 that is utilized in product packaging and created from post-consumer recycled plastics.

Additionally, introducing new products and technological advancements fueling the market's revenue growth and expanding the favorable conditions for the polyethylene market.

Regional Analysis

Depending on the region, the market is analyzed in North America, Asia-Pacific, Europe, and LAMEA.

Asia-Pacific dominates the market.

Asia-Pacific

Asia-Pacific dominates the polyethylene market and will continue the same during the forecast period. Asia accounted for about 37% of shares in global polyethylene production, of which China held around 16.2%. China, Vietnam, Indonesia, and Thailand are at the forefront of industrialization due to rising FDIs in the industrial sector. Countries like Myanmar, Cambodia, and the Philippines offer lucrative market growth opportunities due to economic liberalization and development, raising the inflow of FDI in the countries.

Vietnam's plastic industry is growing at an exponential rate. According to the Vietnam Plastics Association (VPA), the plastic industry is one of the fastest-growing industries, sustaining an average annual growth rate of 16–18%. Additionally, the increasing population in Vietnam is bolstering market growth.

In Indonesia, favorable government regulations are driving the country's plastic industry. Indonesia is projected to be the world's seventh-largest economy by 2030. As per the Indonesian Packaging Association, food packaging accounts for about 70% of plastic consumption, further driving market growth.

Europe

Europe holds the second-largest share of the global market. Europe is anticipated to have strong growth with a CAGR during the forecast period. This is a result of the region's rising demand for automobiles. Due to its excellent heat resistance, low density, electrical insulation, and corrosion resistance, polyethylene is used in cars, encouraging the market's growth in this area. The polymer's adoption is also anticipated to be aided by a growing understanding of the chemical's low density, superior thermal resistance, corrosion inhibition, and electric insulation.

North America

The global market is anticipated to have significant expansion in North America. Due to the high demand for this polymer from the healthcare & pharmaceuticals, electrical & electronics, packaging, and automotive industries, the U.S. accounted for the largest share. Additionally, the expansion of the electrical & electronics, automotive, and medical industries in this region and the expanding consumer products demand would boost the market growth. The material adoption is projected to be aided in North America by the region's robust demand from the consumer goods, automotive, electronics & electrical, packaging, pharmaceutical, and healthcare industries.

LAMEA

One of the key elements impacting growth in the Middle East and Africa is the expanding demand from the packaging and consumer products industries. Increased urbanization, the necessity for safe and practical packaging, and the rise of the packaging industry are some factors anticipated to drive market expansion in this area. The market is anticipated to expand significantly in Latin America. The biggest nation in this area in Brazil. Bottles, plastic bags, and construction materials are just a few of the uses for the material in the area because of its high strength and durability.

Segmental Analysis

The global polyethylene market is segmented by grade, end-user, process, and region.

By grade, it is further segmented into Low-Density Polyethylene and High-Density Polyethylene, where low-density polyethylene holds a significant share. 

Low-density polyethylene

Low-Density Polyethylene Segment to Hold the Highest Market Share. The low-density polyethylene segment is projected to hold the highest market share during the forecast period. They are extensively used in a wide range of products, which include blown and cast film, extrusion and coating, and rotational and injection molding. Additionally, they are commonly used in manufacturing containers, dispensing bottles, tubing, plastic bags for computer components, and various molded laboratory equipment.

High-density polyethylene

High Tensile Strength Drives the Demand for High-Density Polyethylene.High-density polyethylene (HDPE) is widely used in ropes, fishing and sports nets, and industrial and decorative fabrics for its high tensile strength. In 2016, Asia and North America were the leading producers of high-density polyethylene. As per Plastic Insight, they held about 36% and 20% share in the global production capacity of polyethylene, respectively, further driving the segment growth.

Based on end-user, the market is further divided into Packaging, Consumer good, Automotive, Building & Construction, Healthcare, and Electronics. Electronics dominate the market.

Electronics 

Rapidly Expanding Electronics Industry to Provide Impetus to the Market Growth,Semiconductors and microchips are used in every electronic device. In the last few years, the global market has been experiencing a significant surge in demand for semiconductors in the B2B market. As stated by the Semiconductor Industry Association, global semiconductor sales were valued at around USD 468,800 million in 2018, which was USD 360,000 million in 2017. 

Recent Developments

• In September 2022, Eni acquired a 65% ownership in Hergo Renewables S.P.A., a business that manages a portfolio of projects in the two countries with a combined capacity of roughly 1.5GW, to join a new partnership with Infrastructure S.p.A. to build solar and wind power projects in Italy and Spain. The remaining 35% share will remain with Infrastructure.
• In November 2022, Dow chose A.B. Specialty Silicones as its official distributor for the North American elastomeric roof coating market.
• In November 2022, Dow Releases New High-Bonding Adhesive Generation for E.V. Batteries.
• In November 2022, Cooperation between BASF and G-Philos on stationary storage solutions for renewable energy projects is intensifying.
• In November 2022, Elastollan® T.P.U. from BASF was upgraded to a better grade, enabling safer and more dependable charging of electric vehicles.
• In October 2022, BASF will open a surface treatment innovation and technology center in China for Chemetall.