China Becomes a Large Styrene Producer and Consumer

By Sun Yuxiao, Research Institute of PetroChina Jilin Petrochemical Company, and Wang Liheng, CNPC Northeast Refining & Chemical Engineering Co., Ltd.

Global demand growth
slowed down

As the consumption of downstream products of styrene such as polystyrene and ABS resin showed a robust growth, the production of styrene increased fast worldwide. As of the end of 2013, the global capacity for styrene was 32.706 million t/a, of which 16.549 million t/a was in Asia, 5.925 million t/a in North American, 5.456 million t/a in Western Europe, 3.095 million t/a in the Middle East, 696 kt/a in Central and South America and 985 kt/a in Central and Eastern Europe. The consumption and output around the world were nearly equal in 2013, at about 28.539 million tons, and the global overall operating rate of styrene units was about 85%.
In 2013, with 380 kt/a of new styrene capacity coming on line, there were no large styrene units put into production outside China. It is estimated that in 2017, the global capacity will reach 36.048 million t/a, and the overall operating rate will be around 90%.
It is estimated that from 2014 to 2018, the production and consumption of styrene worldwide will continue to increase, although the growth will not be as fast as in the past several years. The forecast average annual growth rate of production capacity is 2.2% and that of demand is 3.5%. The global demand for styrene will be 33.886 million tons in 2018, and the demand in Asia will be 20.347 million tons, accounting for about 60% of the total. Due to the decreased demand for polystyrene and increased prices of raw materials in the United States, Western Europe and Japan, the demand for styrene in these regions will not increase. The demand in the Middle East will increase about 15.4% each year.

Domestic capacity will increase substantially

In 2013, two new styrene plants were put into production in China. One is a 320 kt/a unit of SP Chemicals Holdings Ltd. The other is a 60 kt/a unit of Sinopec Zhanjiang Dongxing Petrochemical Co., Ltd. As of the end of 2013, the total styrene capacity in China had reached 6.939 million t/a. The operating rate had increased from 7.5% in 2012 to about 8%. Table 1 shows major styrene producers in China.
Table 2 shows styrene projects in China under construction or in planning, from 2014 to 2017. The total capacity for styrene in China is expected to reach 10 million t/a by the end of 2017.

Domestic demand increased constantly

In recent years, pushed by booming downstream markets, China became one of the countries with fast growing demand for styrene. During 2008-2013, the average annual growth consumption in China was 11.8%, and that figure in 2014-2017 is forecasted to be 5.2%. In 2013, domestic consumption was 9.21 million tons, up 12.0% year-on-year. The self-sufficiency rate of the year was 60.68%. See Table 4 for details.
Currently in China, styrene is mainly used to produce polystyrene/expandable polystyrene, ABS/SAN, unsaturated polyester resin, SBR, SB elastomers (including SBS, SBC, SIS) and other chemicals, accounting for 55%, 14%, 10%, 5%, 2% and 14% of the total domestic consumption, respectively.
With the steady development of industries like construction materials, home appliances and automobiles, the demand for polystyrene and ABS resin will continue to increase. In particular, materials for energy saving in buildings, such as expandable polystyrene, will become more and more popular. The consumption of SAN resin and thermal plastic elastomers is also increasing rapidly. In addition, the development of glass-fiber reinforced composites, casting products and coatings has greatly promoted the consumption of unsaturated polyester resins, and thus pushed up the demand for styrene. By 2017, the demand for styrene in China will exceed 10 million tons each year.
In recent years, with many newly-constructed styrene plants put into operation in China, the domestic supply has increased year by year and the self-sufficiency rate has increased gradually. In 2013, the volume of styrene imported to China was 3.675 million tons, up 10.1% year-on-year. The self-sufficiency rate was 60.68%, the highest value in recent years. Still, considering the robust demand, the import volume will remain above 3 million tons a year for the next few years. In 2013, China’s major sources of imported styrene included South Korea (31.10%), Japan (13.81%), Taiwan (13.24%), Saudi Arabia (12.16%), Iran (9.56%) and the United States (5.85%).
As a net importer of styrene, China’s export volume is quite small. It was 52.8 kt in 2013.

Price fluctuated widely

In recent years, the price of styrene fluctuated along with oil prices. The average price in 2013 was RMB12 657/t, up 13.85% year-on-year. However, in 2014, it decreased significantly, so the profit margin for making styrene is now only RMB300-400/t.
In July of 2013, the styrene price reached RMB13 800/t, the highest since the economic crisis of 2008, mainly because: (1) China lifted the ban on using expandable polystyrene in takeout containers, which had been implemented since 1999, significantly promoting the consumption of expandable polystyrene and styrene; (2) China’s building construction industry began to use more and more thermal insulation materials such as expandable polystyrene; (3) New EU tire labelling rules led to a widespread increase in the use of SBR in tires. After July, the styrene price decreased gradually to RMB12 600/t. Then it rebounded to RMB13 500/t because several domestic producers underwent overhaul, making the supply of styrene in the domestic market tight. The subsequent price decline to RMB11 850/t was mainly due to a downturn of crude oil prices. In general, the domestic styrene market was at low ebb, and prices slid.   

Suggestions

Worldwide, the styrene market in Europe and North American has already been saturated, and there will be no more new styrene projects constructed in these regions for several years. China has already become the largest consumer and producer of styrene in the world. Instead of expanding capacity, Chinese enterprises are urged to improve competitiveness through efforts in enlarging the production scale of single units, conserving energy and reducing consumption, lowering production costs, optimizing product mix and assuring the supply of raw materials. Therefore, they can be more profitable and more competitive in the global market.                 
Table 1   Major styrene producers in China, 2013 (kt/a)

Company    Capacity    Process
CNOOC and Shell Petrochemicals Co., Ltd.    700    SM/PO co-generation technology from Shell and ethylbenzene dehydrogenation process from ABB/Lummus
Shanghai SECCO Petrochemical Co., Ltd.    650    UOP/Lummus??
Ningbo ZRCC Lyondell Chemical Co., Ltd.    620    Lyondell co-oxidation process to produce propylene oxide and styrene
Tianjin Dagu Chemical Co., Ltd.    500    Technology of Shaw Group Inc.
PetroChina Jilin Petrochemical Co., Ltd.    320    UOP/Lummus
    100    UOP/Lummus+domestic isothermal-adiabatic technology
Jiangsu Leasty Chemical Co., Ltd.    420    Lummus/Monsanto+domestic technology
PetroChina Dushanzi Company    320    UOP/Lummus
SP Chemicals Holdings Ltd.    320    Liquid phase alkylation of benzene with ethylene over zeolites
Changzhou New Solar Chemical Co., Ltd.    250    Ethylbenzene dehydrogenation
Panjing Ethylene Co., Ltd.    225    Fina/Badger
Sinopec Qilu Company    200    Monsanto/Lummus, expanded to 200 kt/a using domestic technology
Shandong Yuhuang Chemical Co., Ltd.    200    Direct vapor phase alkylation of ethanol and benzene adiabatic dehydrogenation of ethylbenzene to styrene under reduced pressure
PetroChina Daqing Petrochemical Company    190    Fina/Badger+produce ethylbenzene from catalytic dry gas
Changzhou Donghao Chemical Industry Co., Ltd.            200    Adiabatic dehydrogenation of ethylbenzene to styrene under reduced pressure, technology from Sinopec; vapor phase process to produce ethylbenzene
Sinopec Baling Petrochemical Company    120    Adiabatic dehydrogenation of ethylbenzene to styrene under reduced pressure, technology from Sinopec
Shaanxi Yanchang Petroleum (Group) Corp. Ltd.    120    Produce ethylbenzene from catalytic dry gas
BASF-YPC Co., Ltd.    120    UOP/Lummus
Sinopec Maoming Company    120    UOP/Lummus
    30    Extract styrene from cracked gasoline
PetroChina Dalian Petrochemical Company    100    Domestic technology of adiabatic dehydrogenation of ethylbenzene to styrene under reduced pressure
Sinopec Anqing Company    100    Produce ethylbenzene from catalytic dry gas
Sinopec Yanshan Company    84(EB100)    Monsanto/Lummus + Smart technology
Sinopec Qingdao Petrochemical Co., Ltd.    80    Produce ethylbenzene from catalytic dry gas, domestic technology of adiabatic dehydrogenation of ethylbenzene to styrene under reduced pressure
Sinopec Guangzhou Company    80    Fina/Badger
Ningbo Keyuan Petrochemicals Co., Ltd.    80    Dehydrogenation of ethylbenzene to styrene under reduced pressure
Shandong Huaxing Petrochemical Group Co., Ltd.    80??     
Hainan Shihua Jiasheng Chemical Co., Ltd.    80    Produce ethylbenzene from catalytic dry gas
PetroChina Jinzhou Petrochemical Co., Ltd.    80    Domestic technology of adiabatic dehydrogenation of ethylbenzene to styrene under reduced pressure
Sinopec Zhanjiang Dongxing Petrochemical Co., Ltd.    60    
PetroChina Jinxi Petrochemical Company    60??     Domestic technology
PetroChina Lanzhou Petrochemical Co., Ltd.    60    Domestic isothermal-adiabatic technology
PetroChina Fushun Petrochemical Co., Ltd.    60    Domestic technology of adiabatic dehydrogenation of ethylbenzene to styrene under reduced pressure
PetroChina Huabei Oilfield Company    80??     
Bluestar Daqing Petrochemical Company    80    Produce ethylbenzene from catalytic dry gas
Total    6 939??     


Table 2   Styrene projects under construction or in planning, 2014-2017 (kt/a)

Company    New capacity    Location    Time to start production
CNOOC Dongfang Petrochemical Co., Ltd.    120    Hainan    2014
Huizhou Daya Bay Petrochemical Industrial Park    100    Guangdong    2015
Abel (Jiangsu) Chemical Co., Ltd.    500    Jiangsu    1H of 2014
Sinopec Jiujiang Company    80    Jiangsu    After 2014
Sinopec Shanghai Petrochemical Co., Ltd.    600    Shanghai    2016
Sinopec Jingmen Company    80    Hubei    2014
CNOOC Daxie Petrochemical Co., Ltd.    280    Zhejiang???     
Maoming Petrochemical Shihua Co., Ltd.    200    Guangdong    
Jiangsu Leasty Chemical Co., Ltd.    80    Jiangsu     
Shandong Huineng Chemical Technology Co., Ltd.    500    Shandong    
Zibo Kunpeng Petrochemical Co., Ltd.    700    Jiangsu    
Total    3 240        


Table 3   Supply and demand for styrene in China in recent years (kt/a, kt)

Year    Capacity    Output    Import volume    Export volume    Apparent consumption
2005    1 874    1 250    2 812    12.5    4 049.5
2006    2 794    2 180    2 343    5.9    4 517.1
2007    2 874    2 100    3 102    0.16    5 201.3
2008    3 174    2 460    2 811    2.06    5 268.7
2009    4 769    2 700    3 646    7.92    6 338.0
2010    5 679    3 806    3 687    11.3    7 481.7
2011    6 159    4 423    3 608    71.1    7 959.8
2012    6 599    4 923    3 337    34    8 226.0
2013    6 939    5 589    3 675    52.8    9 211.2