By Cui Jing, JLC

As of April 25 in 2023, global styrene capacity was around 43 500 000 t/a, of which China has occupied more than 19 300 000 t/a. China will increase its styrene proportion globally as its styrene capacity surges.

Capacity distribution

China’s styrene capacity distribution is shown in Figure 1. 

Figure 1 China’s SBR major sources of imports in 2022

Yangtze River Delta still owns high domestic styrene capacity, and main representatives include Ningbo ZRCC Lyondell Chemical Co., Ltd. with 1 255 000 t/a, Zhejiang Petroleum and Chemical Co., Ltd. with 1 200 000 t/a, Shanghai SECCO Petrochemical Co., Ltd. with 688 000 t/a, News Solar Science and Technology Group Co., Ltd. with 6 500 000 t/a and Lianyungang Petrochemical Co., Ltd. with 600 000 t/a.

North China is the second largest concentration area of styrene production capacity in China, and major representatives include Lihuayi Group Co., Ltd. with 800 000 t/a, Wanhua Chemical Group Co., Ltd. with 650 000 t/a, Qingdao Haiwan Chemical Co., Ltd., two sets of equipment in Shandong Yuhuang Chemical Group Co., Ltd., Tianjin Dagu Chemical Co., Ltd. with 500 000 t/a respectively, Tianjin Bohai Chemical Industry Group Co., Ltd. with 450 000 t/a, and newly-launched Zibo Dream and Change New Material Technology Co., Ltd. in 2023 with 500 000 t/a. 

South China ranks third, which has the biggest domestic styrene producer of CNOOC Shell Petrochemicals Co., Ltd. with 2 sets of equipment producing 1.4 million t/a. Additionally, other leading styrene producers include Gulei Petrochemical Co., Ltd. with 600 000 t/a, Sinochem Quanzhou Chemical Co., Ltd. with 450 000 t/a, Sinopec Maoming Petrochemical Co., Ltd. with 500 000 t/a, and the newly-launched 800 000 t/a equipment in Sinopec Guangdong Petrochemical Co., Ltd.

Consumption analysis 

Judging from three styrene dominant downstream consumers in 2022, polystyrene (PS) slightly consumed more than expandable polystyrene (EPS), becoming the largest downstream consumer with 24.6% share, which is because styrene consumption of EPS decreased but overall PS demand ran counter to the former. And EPS occupied 24.3%, followed by acrylonitrile butadiene styrene copolymers (ABS) with a little increase to 20.9%. Above all, three major styrene consumption forces in the downstream held 69.8%, a slight increase of 0.6 percentage points over 2021. Moreover, the output of unsaturated polyester resin (UPR) kept declining, whose styrene consumption just occupied 4.5%, followed by 8% from the aggregation of styrene-butadiene rubber (SBR), styrene-butadiene latex (SBL), and styrene thermoplastic elastomer (SBC). And others represented 17.8% roughly, including styrene acrylic emulsion, methyl methacrylate (MMA), butadiene, methyl methacrylate-butadiene-styrene (MBS), pharmaceutical, dyes, pesticides and surfactants, etc. (See Figure 2).

Figure 2 The statistics of China’s styrene consumption

From 2018 to 2022, three major styrene consumers in the downstream, EPS, PS, and ABS, totaled up to 73% in 2018, which was expected to drop 3.2 percentage points to around 69.8% in 2022 (See Figure 3).

Figure 3 The statistics of China’s three styrene consumers in the downstream          between 2018 and 2022

EPS: Environmental policy caused domestic EPS downstream demand to drop between 2018 and 2019. However, the demand of recycled plastic and package drove up that of domestic EPC. And domestic EPS apparent consumption grew from 2019 to 2021. Although brownouts and environmental inspections blocked EPS equipment operation in the downstream, household appliances package has raised EPC demand. Along with shrinking demand, downstream consumption dropped in 2022.

PS: Domestic PS apparent consumption increased between 2018 and 2022. And from 2018 to 2019, the surging demand in light guide plate, diffuser plate, XPS drove up PS consumption. Despite a slight increase, PS apparent consumption dramatically slowed down in 2020, which lied in the shutdown causing heavy losses during COVID-19. In 2021, downstream enterprises output slumped as a result of sluggish demand and daily life consumption, double control of energy consumption, and brownouts. And in 2022, because of more serious COVID-19, sluggish demand hampered enterprises kick-off, leading to a slowdown in PS apparent consumption.

ABS: China’s ABS apparent consumption rose first and dropped later between 2018 and 2022. And domestic ABS yearly apparent consumption increased from 2018 to 2020, while ABS demand slowed down obviously in 2020. And ABS apparent consumption declined between 2021 and 2022, especially the year-on-year decline in 2022. 

Review of supply and demand

Over the past five years, styrene supply-demand in China has shifted to an oversupply. According to disaggregated data, capacity, output and apparent consumption have increased each year, with the imports shrinking significantly, while the exports have increased for two years (See Figure 4).

Figure 4 The supply-demand comparison of China’s styrene between 2018 and 2022

Capacity: Since 2020, China's styrene has developed rapidly. Especially from 2020 to 2021, the average annual capacity growth was as high as 27%~28%. Since 2023, the overall capacity has been 19 349 000 t/a, an increase of 10.9% over the end of 2022, with three new sets of new equipment adding 1.9 million t/a. 

Output: In recent years, the rising styrene capacity has also drove up its output. In 2018, the average output growth of styrene was about 11%. From 2019 to 2020, the average annual growth exceeded 15%, which increased to 23% in 2021 with the capacity expansion. However, in 2022, it dropped to 13% due to the launch delay of some equipment and the operation reduction, which is obviously lower than capacity. And in 2022, domestic styrene output was 13 470 000 tons.

Imports: From 2018 to 2020, with a significant demand for styrene, China imported about 3 million tons annually. The rapid expansion of styrene capacity in the past two years has made the imports slump to 1 690 000 tons in 2021. In 2022, China's styrene was completely stuck in overcapacity, and periodic price variations among international regions decreased imports and boosted exports. In 2022, China's styrene imports were 1 140 000 tons, down 548 000 tons from the previous month, with foreign dependence decreasing remarkably.

Exports: China's styrene has been exported little for many years due to long-term short supply. But in the past two years, continuous operation of new equipment has promoted self-sufficiency, turning the situation to oversupply. And international styrene supply reduced due to the output reduction and the shutdown of some large styrene equipment in the US and Europe, meanwhile plus equipment maintenance in Japan and South Korea, resulting in international supply plunge. However, China’s styrene exports gained much between 2021 and 2022, filling a void for styrene internationally. In 2022, China's total styrene exports continued to exceed 560 000 tons, an 140% month-on-month rise.

Apparent consumption: Based on styrene history domestically, apparent consumption steadily increased. And domestic output notched a record high from 2019 to 2021 with surging downstream and apparent consumption, following the apparent consumption of more than 10 million tons in 2018. In 2022, China's overall apparent consumption of styrene will reach 14 million tons, an increase of 560 000 tons year-on-year.

Styrene supply-demand forecast from 2023 to 2025

Styrene: Seen from styrene supply from 2023 to 2025, more output will be available in 2023, with the capacity expansion of more than 20%. And the capacity growth will gradually slow down in 2024, with some equipment operated at the end of 2022, and the capacity growth will be less than 10% by then. In 2025, a lot of new styrene equipment will be available, with the capacity growth projected to climb again. Affected by rising capacity and oversupply, the imports and foreign dependence of styrene continue to decline, with exports increasing or slowing down. By the end of 2025, domestic styrene capacity is expected to surpass 27 million t/a, with imports and exports around 500 000 tons, and output and apparent consumption rising to 17 million tons. Additionally, judging from the expansion of three major downstream consumers from 2023 to 2025, EPS capacity will be driven by its leading enterprises, with little expansion from 2024 to 2025. PS and ABS capacity expansion will be relatively concentrated. Therefore, EPS demand for styrene in the next three years will continue to get lower, while that of PS and ABS will soar, so PS will be the largest consumer of styrene, followed by ABS.

EPS: From 2023 to 2025, due to many sets of EPS equipment put into production, EPS capacity will keep expanding, with increasing outputs and exports, salient overcapacity, declining imports, and competitive industry. By 2025, domestic EPS capacity is projected to be 9.1 million t/a, the output 4 250 000 tons, apparent consumption 4 million tons.

PS: From 2023 to 2025, the increasing domestic new PS capacity brought about rising output. And the output from new equipment will replenish the supply of PS, ensuing meager profits or deficit. In addition, increasing domestic supply has been reducing imports and raising exports, with apparent demand lower than total capacity and the overcapacity of ordinary materials. By 2025, domestic PS capacity is projected to be 9 million t/a, the output 5.4 million tons, the apparent consumption 5.2 million tons.

ABS: From 2023 to 2025, surging output ensues from soaring domestic ABS capacity. However, intensified petrochemical competition and low profits will make output growth well behind capacity. Moreover, the imports will reduce as domestic supply grows, with increasing exports and apparent demand lower than total capacity, and ABS stuck into the oversupply. By 2025, overall domestic ABS capacity will be 11 million t/a, the output 7.5 million tons, and the consumption 7.6 million tons.