Page 133 - CW E-Magazine (17-6-2025)

Point of View

Ethylene manufacturing and market dynamics

Ethylene – the simplest olefin – is the biggest petrochemical by volume and value and a key driver of the industry’s growth,
profitability and investment. It underpins the industry by enabling the production of a diverse range of products that find use as plastics,
fibres, detergents, pharmaceuticals, agrochemicals, etc. Along with propylene, it is a barometer for the petrochemical industry as a whole.

Global ethylene production currently exceeds 225-mt and is from a handful of feedstocks. The economics of its production is largely
determined by the cost of this resource – which is mostly hydrocarbon, as of now – though scale, location and operational efficiencies
play a role.

Broad range of derivatives
Ethylene’s versatility and reactivity comes from the double bond in the molecule. It can be polymerised, epoxidized, chlorinated, hydrochlorinated,
hydrogenated, and hydrolysed to yield derivatives that, in turn, are amenable to further chemical and physical conversions.

Some of the important primary derivatives of ethylene are:
 Polyethylene (PE) [which come in three ‘flavours’ – high density (HDPE), low density (LDPE) and linear low density (LLDPE)];
 Ethylene dichloride (EDC) and vinyl chloride monomer (VCM) [which are precursors to make polyvinyl chloride (PVC), another large
volume thermoplastic];
 Ethylene oxide (EO) [which serves several end-uses including as raw material for surfactants that have cleansing and emulsification
properties] and monoethylene glycol (MEG) [which primarily serves as feedstock for making polyesters];
 Styrene [which can be polymerised and copolymerised to yield several commodity and engineering plastics]; and
 Alpha-olefins [of varying chain lengths used for making surfactants, synthetic lubes, etc.]

Steam cracking
Steam cracking of saturated hydrocarbons is the primary source of ethylene (and other olefins). This is typically carried out in furnaces
operating at high temperatures (750-800°C), and plants are designed to deal with a number of constraining conditions. These include
a need to supply substantial heat at very high temperature; need for short residence time (0.1-0.6 seconds) to minimise subsequent
reactions; need to rapidly quench the furnace gases to freeze product composition; and carry out difficult separations of close-boiling
components to get highly pure olefins (purity of ethylene is particularly important to make PEs).

The hydrocarbon feedstocks used include ethane, propane, butane, and naphtha (obtained as a mid-boiling cut from refining of crude oils).
The lighter the feedstock, the lower the severity of cracking operations; higher the proportion of ethylene; lower the capital expenditure; and
better the economics. The lowest cost producers of ethylene are the ethane-based crackers, such as those in the Middle East (based on natural
gas processing) or in the US (shale gas). Naphtha crackers, which dominate production in Asia and Europe, are typically higher up the ethylene
cost curve.

The compelling economics of gas-based ethylene production has led to the emergence of two major centres today – in the Middle East
(e.g., Saudi Arabia, Iran, UAE, Qatar), and North America (USA and Canada). Given that ethylene costs also account for a significant portion
of the cash costs of primary ethylene derivatives, it is no surprise that these regions are also hubs for their production. Very recently, cracker
operators elsewhere (including in India and China) have also turned to cracking ethane (despite having very little access domestically) and have
been tying up supplies (mainly from the US) and reconfiguring crackers to handle this lighter feedstock.

Naphtha crackers, however, have their place. They produce a broader range of products, besides ethylene and propylene, including
higher olefins and aromatics, that can be valorised to make a significant contribution to overall plant economics.

Crackers are also designed to be versatile with flexibility in feedstock – switching between gas and liquids, depending on the dynamics of
feedstock price, availability changes, and products demand and pricing.

Methanol as feedstock
An alternate technology that has gained momentum in the last decade is methanol-to-olefins (MTO). This technology is deployed
only in China and comes in two avatars: a simpler configuration, mainly in coastal China, is based on imported, gas-based methanol;
and a more complex version, in coal-producing regions in the hinterland, with captive methanol production from coal (coal-to-olefins,

Chemical Weekly June 17, 2025 133

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