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The Ethylene Oxide Production in South & Central America Expected to Reach 415 Thousand Tons in 2023

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According to a recently published report about the South and Central American ethylene oxide market, it was equal to 331 thousand tons in 2013. The largest country market within the region was Brazil, which in 2013 accounted for a share of 80% of the total in volume terms. Until 2023, the South and Central American market is forecast to reach around 415 thousand tons, thus growing at a CAGR of about 4.6% per annum in the period 2018-2023. This is a significant increase, compared to the decline at a CAGR of around 1.2% per year, registered in 2013-2017.

The analytical research projects that the South and Central American production of ethylene oxide is likely to grow to around 415 thousand tons in the medium term. Upward dynamics of the overall installed production capacities in the region and their annual average utilization rates are also expected. In addition, the market is forecast to remain perfectly balanced in terms of supply and demand, also showing moderately upwards dynamics in the medium term.

Ethylene glycol is a crucial raw material for the production of PET resins and polyester fibers, which is why one of the main contributors for the growth of this segment is the growing demand for PET bottles from the packaging industry. One of the major consumers and growth drivers of ethylene oxide market globally is monoethylene glycol (MEG). It finds application in areas such as the production of films, bottles, polyester fibers and resins, as well as an antifreeze liquid and cooling agent in the automobile industry. Furthermore, the demand for antifreeze is seasonal, which makes the global demand for MEG and respectively ethylene oxide quite predictable, as for the antifreeze use. The overall demand for the chemical is tied to the general economy and particularly to the economy in the developing countries such as China, India and others. Typically, downstream MEG and PET are seasonal. In Europe, PET resin and bottle demand usually picks up over the summer as the weather warms up and consumption of bottled beverages increases.

Merger and acquisition activity has been robust in the chemical industry during the past few years. Although, the consolidation trend has been stable even in uncertain times, the number of global chemical merger and acquisition deals is decreasing. Particularly on the ethylene oxide market, there has been interest in corporate restructurings. At the beginning of 2019, INEOS Oxide completed the acquisition of the Wilmar Ethoxylation plant in Lavéra, France. As a result of the transaction, INEOS projects its annual ethylene oxide production capacity at Lavéra to reach 270 kt. Similarly, Balchem Corporation acquired Chemogas, NV, a privately held specialty gases company, thus expanding its geographic presence in the packaged ethylene oxide market.

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