The demand for polyolefin in Southeast Asia has grown at a Compound Annual Growth Rate (CAGR) of more than 6% in the last decade. Southeast Asia has emerged as a major region for the polyolefin industry due to strong demand growth. The major countries in the region which are driving the growth of the polyolefin industry are Thailand, Malaysia and Indonesia. These countries are the largest contributors to polyolefin demand in the region, as per GlobalData.

Singapore, on the contrary, does not have a high consumption but produces and exports huge quantities. It has now emerged as the major supplier of polyolefins in Southeast Asia, with a total export of 4.5 mln metric tpa in 2011. China is a lucrative market for polyolefin exporters in Thailand, Singapore and Malaysia. As China is expected to remain a net importer for the next five years, Thailand and Singapore can export significant additional quantities to China. Thailand has already ramped up its production capacity in the last three years, while Singapore will increase its capacity in the next five years. Malaysia can also take advantage of growing Chinese imports by increasing its production capability. Indonesia, on the other hand, needs to become self-sufficient in meeting its domestic polyolefin demand. Thailand is the regional powerhouse in the Southeast Asian polyolefin industry, with the largest consumption and production of polyethylene and polypropylene. The growth era of the Thai polyolefin industry started in the 1980s after the discovery of large natural gas reserves in the Gulf of Thailand, which provided abundant feedstock, such as ethane and propane, for olefin production. Most of the polyolefin plants in Thailand are situated in Rayong in the eastern seaboard. The reason for the concentration of petrochemicals plants in the eastern seaboard is its proximity to sea routes, which facilitates the transportation of raw material and finished goods. The Thai polyolefin industry is in an advantageous position, not only due to the availability of abundant feedstock but also to the strong demand from the domestic and Chinese markets. With a polyolefin production capacity of approximately 6 mln metric tpa in 2011, Thailand is poised to take advantage of the Chinese demand for polyolefins.

Exports from Southeast Asian countries to China have increased threefold in the last decade, and trade agreements present within Asia will promote further growth in plastics business. A large portion of polyolefins produced in Southeast Asia is exported to the Chinese market, which is the largest importer and consumer of polyolefins in the world. China's demand for polyolefins is expected to grow from 31.45 MMtpa in 2011 to 41.13 MMtpa by 2016 at a CAGR of 5.5%, as per a research by ReportsnReports.com The Association of Southeast Asian Nations (ASEAN) places neighboring countries in an ideal position to trade among one another, as the ASEAN Free Trade Agreement (AFTA) allows trade between member countries with zero import duty. Singapore and Thailand are members of ASEAN, and China has entered into a China-ASEAN Free Trade Agreement (CAFTA) with a corresponding zero import duty regime, allowing these countries to conduct more economical trade. Thailand is the biggest exporter of polyolefins to China, and also boasts the largest consumption and production of polyethylene and polypropylene in the Southeast Asian polyolefin industry. Large natural gas reserves in the Gulf of Thailand provide abundant feedstock, and the location of polyolefin plants in Rayong in the eastern seaboard provides close proximity to sea routes for transportation. Closely following Thailand's industry prowess, Singapore is gradually making its presence felt as a petrochemicals exporter. Singapore does not have a huge demand for polyolefins, but has become a major polyolefins exporter to other Asian countries, attracting exporting companies due to the nation's ideal location and robust infrastructure for petrochemical exports. The country also acts as a global trans-shipment hub for Middle Eastern imports into Asia, making use of AFTA's zero import duties. Other Asian countries import their polymers too, giving Thailand and Singapore extra business. Indonesia is the second largest consumer of polyolefin resins in Southeast Asia, but depends on imports due to insufficient growth of domestic production capacity. Vietnam also lacks the production infrastructure to satisfy domestic demand for polyolefins, which has been growing continuously by more than 15% pa over the last decade. Polyethylene demand in Southeast Asia is expected to increase from 4.89 MMtpa in 2011 to 6.17 MMtpa by 2016, while production is expected to increase from 6.28 MMtpa to 9.29 MMtpa during the same period. Demand for polypropylene in the region is expected to increase from 3.63 MMtpa in 2011 to 4.67 MMtpa in 2016, and production is expected to improve substantially.