Ethylene Production Cost, Usage, Process of Production and Market Overview

In the following post, the product Ethylene has been analysed in-depth, covering various aspects of the commodity’s market dynamics. The blog covers the market’s definition, applications, and process of production, along with key industry players and price analysis.

Ethylene: What is it?

Ethylene (H2C=CH2) is a gaseous hydrocarbon with four atoms of hydrogen bonds linked to carbon atoms with a double bond. It is among the simplest organic compounds called alkenes. The gas appears to be colourless and flammable, with a sweet and musky taste and odour. It is naturally present in natural gas and petroleum, as a hormone in plants (in leaves, bulbs, roots, stems, seeds, and tubers, among others), and in fruits. It is mainly used in the production of Polyethylene (Plastics), Ethylene Oxide / Ethylene Glycol, Ethylene Dichloride, and Styrene.

Ethylene Usage

Ethylene has several applications which are driving up its demand. Commercial ethylene is used as a feedstock in order to produce polyethylene and other polymers, along with its use in the production of industrial chemicals like ethylene glycol, ethylene oxide, and ethylene dichloride. Furthermore, the polymers produced using ethylene are further employed in the manufacturing of fibres, bins, bottles, crates, wire and cable sheathing, trash liners, piping bags, food packaging films, insulation, surface coatings for paper and cardboard, as well as various products like tile and flooring for building and construction applications. It also finds usage in the production of chemicals, including solvents, detergents, ethanolamine’s, antifreeze, polyglycols and surfactants.

Ethylene Production Via The Steam Cracking Process

Ethylene Production from Steam Cracking: Ethylene is produced from the steam cracking process. During the process, steam and a hydrocarbon like ethane are heated up to 750–950 ° C, which converts the large hydrocarbon into lower hydrocarbon resulting in unsaturation. The final product derived is ethylene.

The Major Players In The Ethylene Industry

  • Saudi Basic Industries Corporation (SABIC)
  • Dow Chemical Company
  • LyondellBasell Industries Holdings B.V.
  • INEOS Capital Limited
  • Chevron Phillips Chemical Company LLC

Ethylene Price Trend And Movement

North America

The prices of Ethylene displayed an oscillating trend in the market in the USA. In the middle, prices of the commodity experienced a downward trend because of frail demand from the downstream glycol and polyethylene chain industries. Costs of Feedstock Naphtha have lowered, which relaxed the regional ethylene production cost. However, the prices of Ethylene boosted thanks to the increased prices of feedstock Naphtha. The downstream industry demand has somewhat improved, leading to higher prices. In addition, the supply chain was affected by the shortage of labour and vessel bunching, which limited the region’s available material. Although, prices of Ethylene during the time being dipped on the back of sluggish demand from the downstream industries prior to the seasonal dullness. Additionally, a prominent Ethylene manufacturer, Dow Chemical in Freeport, Texas, USA, contains a capacity of about 725,000 Tons/year and underwent compressor shutdown in the middle of sub-freezing weather, which had an impact on its cost of production.

Asia- Pacific

Ethylene prices displayed mixed market sentiments in China. The prices of Ethylene displayed a downtrend on the back of surplus supply and frail demand. In addition, the continuous measures for lockdown in significant cities amidst growing cases of the pandemic resulted in delays in production, operation, and logistics. This put downward stress on the end-user demand. The general consumption from the downstream glycol chain, polyethylene, as well as other competitive industries, has persisted in staying on the weaker end. In the meantime, the cheap imports from Japan and South Korea resulted in better product availability. Although, the prices of Butadiene bounced back in the middle due to the supply restraint, disruptions in supply chains, and improved demand. The general tightening in supplies, along with restricted inventories, resulted in an increase in price in the Chinese market. Also, the prices of Ethylene, in the end, achieved stability owing to the steady demand and supply dynamics.


The prices of Ethylene displayed a mixed sentiment in the market in Europe. In October, prices of Ethylene dipped due to frail cost pressure from the prices of feedstock Naphtha. Furthermore, the downstream demand from Polyethylene and Glycol value chains declined amidst Europe’s high inflation rate. As per data, the rate of inflation in Europe rose from 9.1% to 10%. Despite that, the prices of Ethylene bounced back. The domestic cost of production stayed high amidst elevated costs of energy and operation, leading to weaker rates of output.

Additionally, the high price of raw material Naphtha led to an increase in price. Although, the downstream industry’s demand has stayed on the weaker end. Also, Ethylene’s most significant manufacturer, LyondellBasell, declared that the Ethylene cracker at the production site for its integrated olefins and polyolefins in Berre, France, will not resume till early 2023 owing to the constantly increased energy costs, cramming margins, and plunging demand for Ethylene in the region. Despite that, the prices of Ethylene began dropping again due to the lacklustre demand from the downstream sector. The supply was aided by cheap imports into the market from Asia, leading to better availability of products in the regional market. In the meantime, the price of domestic production also stabilized amidst the region’s steady energy prices.

Recent Development

A Contract for Ras Laffan Petrochemicals’ Ethylene Unit Was Awarded to Samsung Engineering in Qatar

Samsung Engineering (Seoul, South Korea) made the announcement stating that it had been awarded the contract for an ethylene unit and its utilities in Qatar for the Ras Laffan Petrochemicals Project (RLPP). The petrochemical plant’s Letter of Award (LoA), which is set to be established in Ras Laffan Industrial City, which is 80 km north of Doha, was obtained on October 2022. the RLPP Ethylene Project will be executed by Samsung Engineering paired with CTCI as the ‘Samsung Engineering CTCI Joint Venture’ (SCJV).

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