Global ethylene capacity will rise from 167 million tonnes per year in 2014 to an estimated 208.5 million tonnes per year by 2017, according to a latest report from research and consulting firm GlobalData.

The report said that the Asia Pacific market will maintain its leading position due to high demand for ethylene from major downstream products, such as polyethylene and ethylene oxide, from China and India. Matthew Jurecky, GlobalData’s Head of Oil and Gas Research and Consulting explained that ethylene capacity expansion in China is comprised of several small plants based on heavy feedstock. He said that most new plants will come onstream in 2015 and 2016, boosting the country’s capacity by approximately 53% by the end of the decade.

Further, the US and China account for around two-third of the mentioned capacity increases over the forecast period. The US will drive North America’s ethylene capacity from 35.6 million tonnes per year in 2014 to 46 million tonnes per year by 2017. New plants coming onstream in 2016 and 2017 will contribute most of the region’s capacity additions.

Both the US and China are driving ethylene capacity expansion projects, with the former benefiting from prolific shale gas and the latter from world-leading demand growth, said Jurecky, adding that China continues to lead growth, solidifying the Asia-Pacific as the single largest production region and helping to push global capacity over the 200 mmty milestone by 2017.

Jurecky said that less expensive ethane derived from wet shale gas makes ethylene production highly attractive and is behind large-scale US capacity additions. Many companies, such as Dow Chemical, Chevron Phillips, Exxon Mobil and Royal Dutch Shell, are betting on increased competitiveness in the US and are constructing ethane crackers to produce cost-advantaged ethylene.