Present Status and Projection of Styrene Monomer

A Capacity surplus of styrene monomer in the world

The capacity of styrene monomer (SM) is surplus in the world, especially in North America and Europe. Global styrene monomer capacity growth is higher than the consumption growth, the operating rate is not high and large international companies have sold, regrouped or shut down this part of the business. Since 2007, around 3.0 million t/a of styrene monomer capacity in the world has been closed. In April 2011, Mitsubishi Chemical Corporation of Japan shut down its 400 thousand t/a styrene monomer unit in Kashima, Japan. Previously, Huntsman Corporation of the United States shut down a styrene monomer unit in Australia by the end of 2009, and Dongbu Electronics of Korea shut down a unit in Ulsan, Korea in 2008. Following Dow chemical’s sale of its styrene monomer business in 2010, Nova Chemical of Canada sold its share of a joint venture between Ineos and Nova to Ineos. After that, BASF spun off its styrene monomer business in 2011 and established a styrene monomer business company-STYROLUTION with Ineos, conducting the integration of both sides’ global businesses such as styrene monomer, polystyrene (PS), acrylonitrile-butadiene-styrene (ABS), styrene-butadiene block copolymer and other styrene based copolymers. In the next two years, the global styrene monomer sector will still continue to merge and regroup.
   With the startup of the large-scale styrene monomer units with low cost in the Middle East, the styrene monomer units with low economic benefits in other regions will bear the increasing pressure, and more styrene monomer units will suspend production in succession. However, the new capacities in China and the Middle East will replace the capacities that being closed in this year and next year. The global styrene monomer market has already transferred from the matured Western countries to the emerging economy Asia.
   Asia is the world's largest styrene monomer consumption region, and the production of styrene monomer cannot satisfy market demand in Asia. The consumption of styrene monomer in Asia was around 14.6 million tons in 2010, accounting for around 55% of the world total, and the growth of the demand for styrene monomer in Asia accounted for 59% of the world total. According to the projection made by CMAI, the average annual consumption growth of styrene monomer in the world and Asia will reach 3% and around 5.1%, respectively during 2011-2013,and will continue to grow by 4.2% in Asia in the next five years. The demand for styrene monomer in the Middle East will climb from less than 500 thousand tons in 2010 to around 800 thousand tons in 2015. Northeast Asia will hopefully to become the largest consumption region of styrene monomer from the Middle East, and the import volume of styrene monomer in Northeast Asia will reach 350 thousand tons each year in next five years.
   China is an important consumption country of styrene monomer in Asia. China’s consumption of styrene monomer reached around 7.8 million tons in 2010. China will still be the world’s important styrene monomer target market in the future.
   In 2010, there were two large styrene monomer units being put into operation in the world, all in Asia, being 600 thousand t/a unit in Pars Petrochemical of Iran and 620 thousand t/a propylene oxide (PO)/ styrene monomer unit in Ningbo ZRCC Lyondell Chemical Co Ltd, respectively. PTTAR of Thailand plans to start up a 300 thousand t/a styrene monomer unit in 2012. IRPC of Thailand is expanding capacity of its styrene monomer unit, and the 60 thousand t/a of new capacity is expected to start up in 2012. A 600 thousand t/a styrene monomer unit of both Korea's Honam Petrochemical and Qatar Holdings that was originally planned to start production in Qatar in 2011 might be postponed to 2013. Indian Oil Corporation originally planned to start up its 600 thousand t/a styrene monomer unit in October 2011, however, the construction of the unit was postponed. In April 2011, Mitsubishi Chemical Corporation of Japan permanently closed its styrene monomer unit in Kashima, Japan.

Table 1 Newly Added Capacity of SM Outside China 2011-2013 (kt/a)
Producer    Location    Newly added capacity    Startup time
Korea's Honam Petrochemical and Qatar Holdings    Qatar    600    2013
Indian Oil Corporation    India    600    planning
PTTAR of Thailand    Thailand    300    2012
IRPC of Thailand    Thailand    60    2012，expansion
Pemex     Mexico    100    expansion
Total        1 660    

   Due to the global shortage of new investment projects after 2012, styrene monomer market in Asia will be once again in short supply after 2015. According to the projection made by CMAI, the next peak of petrochemical industry will appear in 2016, and during 2010-2015, 67% of the newly added demand for petrochemical products will come from China and other Asian regions.


B Styrene monomer market in China

1. Production
China’s capacity of styrene monomer was only 1.717 million t/a in 2005. As of the end of 2010, China had 28 styrene monomer producers with a total capacity of 5.634 million t/a, accounting for around 17% of the world total and around 30% of the Asian total. The average annual growth of styrene monomer capacity in China was 26% during 2005-2010.
   China’s styrene monomer units have gradually developed toward large scale in recent years. The raw materials like ethylene and benzene of Tianjin Dagu Chemical Co Ltd’s 500 thousand t/a styrene monomer unit are supplied by Sinopec Tianjin Petrochemical Co Ltd. A 620 thousand t/a propylene oxide / styrene monomer unit of Ningbo ZRCC Lyondell Chemical Co Ltd is the largest PO/ SM unit in the world, and the its capacity of styrene monomer and PO is 620 thousand t/a and 285 thousand t/a, respectively. CNOOC and Shell Petrochemical Co Ltd has expanded its styrene monomer capacity from 560 thousand t/a to 700 thousand t/a.
   In addition, PetroChina, Qatar Petroleum International (QPI) and Shell have also intended to construct styrene monomer unit in Taizhou refining & chemical project. It is expected that China’s capacity of styrene monomer will reach around 8.0 million t/a by 2015.

Table 2 China’s Styrene Monomer Producers in 2011   (kt/a)
Region    Producer    Capacity
Northeast China    PetroChina Jinzhou Petrochemical Co Ltd     80
    PetroChina Jilin Petrochemical Co Ltd    140
    PetroChina Jinxi Petrochemical Co Ltd    60
    Panjin Ethylene Co Ltd?    225
    PetroChina Dalian Petrochemical Co Ltd    100
    PetroChina Daqing Petrochemical Co Ltd    225
    PetroChina Fushun Petrochemical Co Ltd    60
    China Bluestar Daqing Petroleum Chemical Co Ltd      80
    Subtotal    970
Northwest China    PetroChina Lanzhou Petrochemical Co Ltd    60
    PetroChina Dushanzi Petrochemical Co Ltd    320
    Lanzhou Huifeng Petrochemical Co Ltd    25
    Shaanxi Yanchang Petroleum (Group) Corporation    120
    Subtotal    525
North China    Sinopec Qilu Petrochemical Co Ltd    200
    Sinopec Beijing Yanhua Petrochemical Co Ltd    80
    Sinopec Qingdao Refining & Chemical Co Ltd    85
    Renqiu Petrochemical Co Ltd?    80
    Shandong Dawang Huaxing Petrochemical Group Co Ltd    80
    Shandong Yuhuang Chemical Co Ltd    200
    Tianjin Dagu Chemical Co Ltd    500
    Subtotal    1 225
East China    Shanghai Secco Petrochemical Co Ltd    650
    BASF-YPC Co Ltd?    120
    Changzhou Donghao Chemical Co Ltd    200
    Changzhou New Solar Chemical Co ltd    250
    Shuangliang Leasty Chemical Co Ltd    420
    Sinopec Zhenhai Refining & Chemical Co Ltd    620
    Sinopec Anqing Petrochemical Co Ltd    100
    Ningbo Keyuan Petrochemical Co Ltd    80
    Subtotal    2 440
South China    Sinopec Maoming Petrochemical Co Ltd    100
    CNOOC and Shell Petrochemical Co Ltd    700
    Sinopec Guangzhou Petrochemical Co Ltd     80
    Guangzhou New Huayue Petrochemical Incorporated Company    30
    Hainan Shihua Jiasheng Chemical Co Ltd    80
    Subtotal    990
Total    6 150

Table 3 China’s SM Units Being Built or Planned (kt/a)
Producer    Capacity     Startup time
PetroChina Jilin Petrochemical Co Ltd    320    2012
Sinopec Baling Petrochemical Co Ltd    120    2012
Sinopec Beijing Yanhua Petrochemical Co Ltd    27    2011
SP Chemicals (Taixing) Co Ltd    320    2012
Sinopec Qingdao Refining & Chemical Co Ltd    80    2012
PetroChina, Qatar Petroleum International (QPI) and
Shell    600    2013
Guangxi Beihai Petrochemical Co Ltd    100    2012
Sinopec Guangzhou Petrochemical Co Ltd    80    Planned to expand the capacity
Sinopec Nanjing Jinling Petrochemical Co Ltd     60    Planned to construct
Taiwan Styrene Monomer Corp (Quanzhou)    150    Planned to construct
Shandong Hengyuan Petrochemical Co Ltd
    60
    Under construction started  Feb 2011
Hong Kong Runda Industry Group Co Ltd    850    Planned to construct
Shantou Ocean Enterprises (Group) Company    400    Planned to construct
Total    3 317    


2. Supply and demand
Domestic output of styrene monomer is still far below the demand, the self-sufficiency rate remains at around 45%, and the supply gap is around 3.0 million tons.
   China’s output of styrene monomer was 1.47 million tons in 2005, and reached 4.171 million tons in 2010 with an average annual growth of 10.6% during 2005-2010. The capacity of styrene monomer in China reached 5.634 million t/a in 2010, up 37.3% year-on-year. China’s consumption of styrene monomer reached more than 7.5 million tons, a year-on-year growth of 23.8%. In 2011, the capacity and output of styrene monomer continued to grow stably and the output growth was expected to be 11.6%.
   The import volume of styrene monomer in China increased stably during 2005-2010. The increase of the self-sufficiency rate has led to the bigger change of market pattern. It is expected that the domestic self-sufficiency rate of styrene monomer will further increase in the next few years, and the domestic tense supply of styrene monomer will be alleviated to a certain extent. It is expected that China’s capacity of styrene monomer will reach 8.0 million t/a by 2015, and the self-sufficiency rate will climb to over 60%. The capacity growth of styrene monomer in China will slow down in the next two years, however, due to the constant capacity expansion of styrene monomer downstream products like ABS, SBR (styrene butadiene rubber) and SB elastomers, the demand for styrene monomer will grow considerably. It is expected that China’s demand for styrene monomer will reach around 10.0 million tons by 2015.

Table 4 China’s Supply and Consumption of SM 2005-2010 (kt/a, kt, %)
Year    Capacity     Output     Import volume     Export volume     Apparent consumption     Self-sufficiency rate
2005    1 717    1 470    2 812    13    4 269    34.4
2006    2 782    2 386    2 343    6    4 723    50.5
2007    2 874    2 695    3 101    0    5 796    46.5
2008    3 164    2 660    2 811    2    5 469    48.6
2009    4 104    2 700    3 646    8    6 338    42.6
2010    5 634    4 171    3 687    11    7 847    53.2


3. Import of styrene monomer
China’s styrene monomer capacity has grown constantly in recent years, however, it still can not meet the rapid growth of demand for styrene monomer in downstream sectors, and China needs to import great quantities of styrene monomer each year.
   The total import volume of styrene monomer in East China reached 2.8168 million tons in 2010, accounting for 76.7% of the national total. South China imported 764.6 thousand tons of styrene monomer, accounting for 20.8%. The import volume in North China was 91.4 thousand tons, accounting for 2.49%.
   Imported styrene monomer in Mainland China mainly sourced from Korea, Japan, Saudi Arabia, Singapore, the United States, Taiwan province, Indonesia and Russia. Korea and Japan are two important styrene monomer import sources of Mainland China, with import volume of 1.9159 million tons in 2010, accounting for over 50% of the total. With the startup of the Middle East’s new styrene monomer units in succession, China’s import volume from the Middle East in 2010 had a year-on-year growth of 612% due to the startup of a 600 thousand t/a styrene monomer unit of Iran Petrochemical in Pars, and Iran exported 174.2 thousand tons of styrene monomer to Mainland China. At the same time, a 777 thousand t/a styrene monomer unit in Saudi Chevron operated stably, so the import volume of styrene monomer from Saudi Arabia grew apparently. In addition, Singapore exported 214.4 thousand tons of styrene monomer to Mainland China in 2010, up 41% year-on-year. In 2012, due to the major changes of politics and economic situation in the Middle East, the import sources of styrene monomer in Mainland China may have changes.

Table 5 Projection of the Supply and Demand for SM in China
Item    2005     2010     2015 E
Capacity (kt/a)    1 717    5 634    7 900
Operating rate (%)    86    74.0    85-90
Output (kt)    1 470    4 170    6 720-7 110
Apparent demand (kt)    4 269    7 847    10 800
Supply gap (kt)    2 799    3 676    3 290-3 770
Self-sufficiency rate (%)    34.40    53.20    65-67
Note: Figures in 2015 are predictive values

4. Downstream demand
At present, styrene monomer in China is mainly used for PS, ABS resin, SBR and SBR latex, and unsaturated polyester resin (UPR). China’s demand for styrene monomer reached 7.847 million tons in 2010, a year-on-year growth of 23.8%. In 2010, expansible polystyrene (EPS) and non- expansible polystyrene are still the two largest downstream sectors of styrene monomer, and the consumption of styrene monomer in EPS and non- expansible polystyrene was 2.731 million tons and around 1.766 million tons, accounting for over 34% and 22.5% of the total, respectively.
   In the next few years, due to the rationalization of terminal products and the appearance of alternative products for PS, China’s consumption growth of PS will slow down whereas the demand for ABS resins and SBR will grow rapidly, being the new driving force for the consumption growth of styrene monomer. With the rapid development of the sectors such as building material, household appliances and automobile, China’s demand for styrene monomer will still continue to increase. It is expected that the consumption of styrene monomer will reach around 10.0 million tons by 2015.

Table 6 Projection of Consumption Mix of SM in China (kt, %)
Consumption sector        2005         2010         2015 E
        Consumption     Proportion     Consumption    Proportion     Consumption     Proportion
PS    2 540    59.5    4 497    57.3    6 310    58.4
ABS/AS    620    14.5    1 350    17.2    2 630    24.4
SBR    180    4.2    322    4.1    470    4.4
UPR    400    9.4    581    7.4    760    7
SBS    120    2.8    150    2    220    2
Others    410    9.6    942    12    410    3.8
Total    4 270    100.0    7 842    100.0    10 800    100.0


Conclusion

*The capacity of styrene monomer has been surplus in the world, but the capacity and consumption of styrene monomer have grown constantly in Asia, especially China.
*Domestic styrene monomer sector has been gradually mature, the demand growth has slowed down and the self-sufficiency rate has increased apparently. China's economic development has provided a broad market space for styrene monomer.
*China’s demand for styrene monomer will still grow continually. However, with the startup of new units in Asia and the Middle East, China's styrene monomer enterprises will face more and more challenges.