Ethylene Glycol Market size is forecast to reach $45.6 billion by 2026, after growing at a CAGR of 4.6% during 2021-2026, owing to the increasing usage of ethylene glycol in various end-use industries such as automotive, construction, cosmetics, textiles, and more. Ethylene glycol is an essential raw material, for industrial applications such as for making polyester resins, fibers, and films. Many advantages of ethylene glycol such as low volatility and low boiling point are also driving its demand in the market. The rapid growth of the automotive industry has increased the demand for dewatering agents, antifreeze, and coolants; thereby, fueling the market growth. Furthermore, the flourishing food and beverages, and construction industry are also expected to drive the ethylene glycol industry substantially during the forecast period.
The spread of the novel coronavirus (SARS-CoV-2) has had impacts across all sectors including the automotive and packaging industry. There is a decrease in demand for packaging due to the import-export restriction by the governments in various regions. Also, the manufacture of automobiles has been disruptively clogged, contributing to a major loss in the total automotive sectors. For instance, according to the European Automobile Manufacturers Association, in June 2020, demand for new commercial vehicles across the EU remained weak (-20.3%), although the rate of decline slowed compared to April and May. Three out of the four largest markets in the region posted double-digit percentage declines last month: Germany (-30.5%), Spain (-24.2%), and Italy (-12.8%), while France recorded a modest increase (+2.2%). With the decrease in automotive production, the demand for antifreeze has significantly fallen, which is having a major impact on the ethylene glycol market.
Ethylene Glycols Market Segment Analysis – By Type
The monoethylene glycol (MEG) segment held the largest share in the ethylene glycols market in 2020 and is growing at a CAGR of 5.8%. Monoethylene glycol (MEG) is most commonly used as a hydrate inhibition and dewatering agent. Its low doses are often injected continuously in the pipeline where hydrate formation is a problem. Monoethylene glycol (MEG) is the most commonly used glycol because it is more efficient at a given mass concentration than diethylene glycol (DEG). This is because DEG may be used as an agent in the pipeline, only if the glycol used in the subsequent dehydration process is also DEG. Furthermore, monoethylene glycol is primarily used for manufacturing polyethylene terephthalate, and the growth of the global beverages market is projected to drive the demand for ethylene glycols over the forecast period.
Ethylene Glycols Market Segment Analysis – By Technology
The gas-based segment held the largest share in the ethylene glycols market in 2020. Traditional processing of ethylene glycols is now based on petrochemical routes, derived from petro-ethylene by oxidation followed by hydration. The depleting petro-resources, however, placed high pressure on the lack of petroleum in countries and/or districts to keep developing, such as China. Therefore, it is becoming increasingly desirable to create a new non-petroleum resource (i.e. gas-based) method to be an alternative to the petroleum-based process, which is the key factor flourishing the gas-based ethylene glycol market in various regions during the forecast period.
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Ethylene Glycols Market Segment Analysis – By Application
The chemical intermediate segment held the largest share in the ethylene glycols market in 2020, owing to the increasing usage of ethylene glycols as a chemical intermediate for manufacturing various products. Ethylene glycols are utilized in the manufacture of polyester fibers, polyethylene terephthalate (PET) resins, alkyd resins, and more. Thus, ethylene glycol is an important raw material for resins required in various applications ranging from clothing, textiles, packaging, kitchenware, polyester and fleece fabrics, upholstery, carpets, and pillows, to light and sturdy polyethylene terephthalate drink and food containers. Thus, the increasing application of polyester fibers, polyethylene terephthalate (PET) resins, and alkyd-resins are increasing the demand for ethylene glycol from different end-use industries, which is driving the market growth during the forecast period.
Ethylene Glycols Market Segment Analysis – By End-Use Industry
The packaging segment held the largest share in the ethylene glycol market in 2020 and is growing at a CAGR of 6.2%. For the manufacture of polyester fibers and film, polyethylene terephthalate (PET) resins, and more, ethylene glycol is a critical ingredient. Another big end-user of ethylene glycol is the packaging industry, where ethylene glycol-based PET is utilized, among other items, to produce water bottles, carbonated soda bottles, and food packaging. PET is light and sturdy and can perform a range of functions while being healthy for customers. One of the most commonly used thermoplastic polymer resins is polyethylene terephthalate (PET) resin. Extruded or molded into plastic bottles, containers, and trays, it is used to create rigid packaging for the food and beverages industry. Thus, the increasing application of polyester fibers and film, polyethylene terephthalate (PET) resins in the packaging industry is the major factor driving the demand for ethylene glycol in the packaging market during the forecast period.
Ethylene Glycols Market Segment Analysis – By Geography
Asia-Pacific region held the largest share in the ethylene glycol market in 2020 up to 42%, owing to the increasing demand for packaging materials from the food and beverages industry in the region. The growing use of polyethylene terephthalate (PET) plastics instead of paperboard, wood, and metal in the packaging industry is fueling the ethylene glycol market growth. According to the Ministry of Industry and Information Technology (MIIT), retail sales of grain, oil, and food reached 499.63 billion yuan (about $70.41 billion), up 13.8 percent from last year. During the period, beverage sales stood at 63.46 billion yuan, a 6.3-percent growth year-on-year. According to the United States Department of Agriculture (USDA), the Japanese food processing industry is one of the worlds most advanced and sophisticated, in 2018, the production of food and beverage products was $216.8 billion, up from $211.5 billion in the previous year. And in 2018, the total value of all Japanese food and beverage retail sales was $479.29 billion (¥53.339 billion), an overall increase of 2.3% from 2017. According to the United States Department of Agriculture (USDA), Australia’s food, beverage, and grocery sectors account for over one-third of the country’s total manufacturing sector. There was a turnover of US$126 billion (A$182 billion) in 2019, an increase of three percent over the previous year. Thus, with the expanding food and beverage industry, the demand for packaging will also subsequently increase, which is anticipated to drive the ethylene glycol market in the APAC region during the forecast period.
Ethylene Glycols Market Drivers
Increasing Automotive Production
Engine coolant, also known as antifreeze, is mixed with water to keep the automotive radiator from freezing in extreme cold and overheating in extreme heat. And ethylene glycol is largely employed in the production of automotive antifreeze. China is the world’s largest vehicle market, according to the International Trade Administration (ITA), and the Chinese government expects the production of vehicles to reach 35 million by 2025. According to Statistics Netherlands (CBS), the total number of road vehicles registered on 1 January per year in the Netherlands increased from 1,12,87,017 in 2018 to 1,14,95,837 in 2019, to 1,17,03,420 in 2020. Light commercial vehicle production has increased from 326,647 in 2017 to 358,981 in 2018, according to OICA, an increase of 10.2% in Brazil. Thus, increasing automobile production will require more ethylene glycol for producing antifreeze, which will act as a driver for the ethylene glycol market during the forecast period.
Expanding Fabric & Textiles Industry
There is a growing demand for polyester fiber for the manufacturing of apparel because of its properties such as lightweight, good hygroscopicity, and softness. The polyester fiber is commonly used to manufacture thin thermal underwear, casual warm winter wear, and sportswear as it provides good properties of warm-keeping, comfortable feeling, and soft luster. It is also used to make soft, thermal, wear-resistant socks and gloves. The U.S. fashion apparel industry is expected to hit approximately $400 billion by 2025, according to the International Trade Administration (ITA). The Government of India has introduced the ‘Apparel Park for Exports’ system for imparting oriented thrust to set up international standard apparel production units at potential growth centers. Therefore, it is anticipated that with the expanding fabric and textiles industry, the demand for ethylene glycol will see an upsurge in its demand, as it is extensively utilized in manufacturing polyester fiber. Thus, the expanding fabric and textile industry act as a driver for the ethylene glycol market during the forecast period.
Ethylene Glycols Market Challenges
Drawbacks Associated with Ethylene Glycol
Ethylene glycol’s biggest downside is that it is hazardous to humans and animals. Although ethylene glycol is (only)’ dangerous’ in the vast majority of Safety Data Sheets, there is a wealth of evidence to suggest that relatively small quantities can prove fatal. The problem of ethylene glycol poisoning in the United States continues to be discussed in the US Senate. In the presence of oxygen, ethylene glycol has a normal propensity to degrade. Several acids, including glycolic, formic, acetic, and oxalic acids, are formed during degradation by-products. These acids will rapidly corrode carbon steel and other metals unless appropriate measures are taken such as minimizing the availability of oxygen, pH buffering of acid, and proactive corrosion prevention via inhibitors. Thus, these factors are anticipated to become a significant factor restraining the market growth during the forecast period.
Ethylene Glycols Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the ethylene glycols market. Major players in the ethylene glycols market are Reliance Industries Ltd. – India, Huntsman Corporation- US, BASF SE, Kuwait Petroleum Corporation, AkzoNobel- Amsterdam, Clariant- Switzerland, Formosa Plastics Group- Taiwan, Exxon Mobil Corp., Ineos Oxide, Ultrapar Participacoes Sa, Lyondellbasell Industries and Honam Petrochemical Corporation.
In May 2019, Shell Chemical LP announced to invest $1.2 billion as a part of manufacturing expansion in Louisiana. This expansion impacted the growth of the monoethylene glycol market in the U.S.
Asia-Pacific dominates the ethylene glycols market, owing to the increasing automotive industry in the region. In 2019, according to OICA, the automotive production in Malaysia and Vietnam has increased up to 571632, and 250000, i.e., 1.2%, and 5.5%, higher than the previous year.
Ethylene glycol and ethylene oxide act as a key ingredient in the manufacturing of paints, paper, textiles, and adhesives. As a result, the rise in demand for these applications is also boosting the growth of the ethylene glycol market in various regions during the forecast period.
Exposure to ethylene glycol is known to be very toxic for humans; ingestion of ethylene glycol may severely affect kidneys, heart, central nervous systems, which may hinder the market growth.
Due to the Covid-19 pandemic, most of the countries have gone under lockdown, due to which the projects and operations of various industries such as aerospace, packaging, and automotive are disruptively stopped, which is hampering the ethylene glycols market growth.
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