Since the beginning of this year, the domestic styrene trend has fluctuated sharply, and the overall trend has been rising. As of May 7, the price of styrene in East China closed at 10,200 yuan/ton, an increase of 64.5% during the year.
The industry analysts believe that the recent centralized maintenance of the domestic Ningbo Daxie 360,000 tons/year, Hainan Petrochemical 80,000 tons/year and Jiujiang Petrochemical 80,000 tons/year will promote the strong growth of the styrene market in the short term. But in the long run, the styrene industry will be under greater pressure as new capacity is put into production one after another, and the supply pattern will change.
The domestic styrene industry has developed rapidly in recent years. As of the end of 2020, the styrene production capacity has reached 12.22 million tons per year. Entering 2021, Anhui Jiaxi 350,000 tons/year, CNOOC Shell 700,000 tons/year and Sinochem Quanzhou 450,000 tons/year styrene plants have been put into operation one after another, making domestic styrene production capacity jumped to 13.72 million tons/year. In addition, Luoyang Petrochemical 120,000 tons/year, Ningbo Huatai Shengfu 300,000 tons/year, and Gulei Petrochemical 600,000 tons/year are planned to be put into operation during the year. According to incomplete statistics from Chemical Online, the styrene capacity planned to be put into production this year is as high as 5 million tons, and the market supply will increase significantly.
In terms of process routes, ethylbenzene dehydrogenation is still the most important process for the production of styrene, and the propylene oxide/styrene (PO/SM) co-oxidation process benefits from the cost advantage of co-production and is increasingly favored by manufacturers. The future development trend of styrene. Judging from the installations planned to be put into operation this year, the production capacity of the installations using the PO/SM co-oxidation method is about 3.28 million tons/year, accounting for more than 60%.
From the perspective of import and export markets, due to insufficient domestic styrene production capacity in previous years, 40% to 50% of styrene products were dependent on imports. The main sources of imports were Saudi Arabia, Taiwan, Japan, and Kuwait. Import sources contributed to the trend of the domestic styrene market. Greater impact. However, in recent years, due to the increase in domestic production capacity, the share of imports has been squeezed. In 2020, my country’s import dependence has dropped to about 23%. The latest customs data show that from January to March 2021, styrene imports were 505,200 tons, a year-on-year decrease of 34.3%, and the degree of dependence on imports continued to decline.
While production capacity is growing rapidly, the growth rate of downstream demand is far from keeping up.
Styrene is mainly used to produce resin products such as EPS, ABS and PS, accounting for more than 70% of total consumption. In recent years, ABS has steadily increased its production capacity under the support of the home appliance and electronics industries, while the PS and EPS industries have been subject to low profits and poor demand, and production capacity has rarely increased. According to statistics, in 2021, the production capacity of ABS, EPS and PS devices planned to be put into operation is less than 3 million tons/year. Compared with the expansion of styrene up to 5 million tons/year or more, the expansion of downstream demand is obviously insufficient.
On the whole, in recent years, the construction of integrated refining and chemical projects is in full swing, and most of the downstream facilities are equipped with styrene devices. This makes the styrene industry enter the peak of production in 2020-2022, and the leap-forward growth of domestic production capacity is bound to squeeze the share of imports. At the same time, the growth rate of the main downstream ABS, EPS and PS capacity has not kept up with the expansion of styrene, and the demand side has not followed up enough, and the styrene industry will show a pattern of loose supply.
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