Monoethylene glycol (MEG) is produced from ethylene, a downstream product of crude oil and natural gas. Ethylene-intermediator ethylene oxide is hydrated to monoethylene glycol. The monoethylene glycol market is expected to expand significantly due to strong growth of polyethylene terephthalate (PET) in the packaging industry coupled with increasing production of polyester fibers in Asia Pacific. Based on major applications, the monoethylene glycol market can be classified into polyester fiber, polyethylene terephthalate (PET) films, antifreeze, and other applications such as intermediate chemicals. Polyester fiber is the largest application of the monoethylene glycol (MEG) market. Demand for monoethylene glycol was the highest in emerging economies in Asia Pacific in 2014. The demand in Asia Pacific accounted for more than 60% of the global demand for monoethylene glycol. However, demand for monoethylene glycol is rising at a sluggish pace in mature economies in North America and Europe, owing to the sustainability issue related to monoethylene glycol-based products.
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High degree of forward integration from raw material manufacturers exists in the value chain of the monoethylene market. Several key players are engaged in the manufacture of raw materials. Monoethylene glycol is manufactured from ethylene, a downstream product of crude oil. Hence, oil and gas companies such as Royal Dutch Shell plc and Reliance Industries Limited are involved in the production of raw materials. Royal Dutch Shell plc and Reliance Industries Limited are also engaged in the production of monoethylene glycol as part of their downstream process. Saudi Arabia Basic Industries Corporation (SABIC) is the largest player in the monoethylene glycol market. It is a forward integrated company. SABIC utilizes its monoethylene glycol in the manufacturing process of plastic films at its existing plants. Some major chemical companies also manufacture monoethylene glycol. Other key manufacturers include Nan Ya Plastics Corporation, Mitsubishi Chemical Corporation (MCC), BASF SE, and The Dow Chemical Company.
Fluctuation in prices of raw materials is expected to be the key restraint in the monoethylene glycol market. Exploration of shale gas and environmental factors related to usage of coal as a raw material are anticipated to lead to further fluctuations in prices of feedstock. This is considered a primary restraining factor for the monoethylene glycol market. Fluctuation in prices leads to unpredictable supply. This hamper the manufacturing process. Thus, fluctuation in prices of raw materials can be a major setback for the monoethylene glycol market. Prices of products of monoethylene glycol differ; polyester grade monoethylene glycol costs marginally higher than film and sheets products. In terms of region, prices of monoethylene glycol are the highest in Europe, followed by North America, Latin America, the Middle East, and Asia Pacific. The monoethylene glycol market in Asia Pacific has witnessed large capacity additions in the last few years. Thus, companies operating in the region can sell products at competitive prices.
In terms of region, Asia Pacific was the largest segment of the monoethylene glycol market in 2014. Growth in the region is primarily driven by China; however, demand for monoethylene glycol is also increasing steadily in India and Taiwan. Furthermore, demand for monoethylene glycol is estimated to rise significantly in Middle East and Africa. Saudi Arabia is one of the largest producers of monoethylene glycol primarily owing to the steady supply of raw materials. The packaging industry is expanding significantly in Brazil. This is projected to drive the demand for monoethylene glycol for polyethylene terephthalate (PET) films in Latin America.
The report includes profiles of leading companies such as Saudi Arabia Basic Industries Corporation (SABIC), Royal Dutch Shell plc, Reliance Industries Limited, Nan Ya Plastics Corporation, Mitsubishi Chemical Corporation (MCC), BASF SE, The Dow Chemical Company, and LyondellBasell Industries N.V.