China styrene demand to slow - Nihon Oxirane

28 June 2007 04:04  [Source: ICIS news]

SINGAPORE (ICIS news)--The yearly demand for styrene monomer (SM) in China will slow down from 2008 onwards, a senior executive with Japanese propylene oxide (PO) and SM producer Nihon Oxirane said on Thursday.

The growth of SM and styrenics plastics can be seen in three key stages, said Masayoshi Akiyama the company’s deputy general manager, speaking at the two-day 3rd Asian Aromatics and Derivatives Conference in Singapore organised by ICIS and International eChem.

Prior to 1999, China imported mostly resins like polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) while from 2000-2005, it became a large importer of SM to supply its downstream resin plants, he said.

From 2006 onwards, local production capacity of SM had increased significantly and China would depend on local production for its monomer requirements in the future, Akiyama added.

Local SM capacity had increased by nearly threefold to 2.5m tonnes/year in 2006 from 974,000 tonnes/year in 2004.

Besides, China had been absorbing additional supplies from the US and the Middle East, said Akiyama, estimating that in 2006, the US shipped some 290,000 tonnes of SM to China while the Middle East shipped 400,000 tonnes.

Meanwhile, downstream styrenics plastics growth in China had tapered off, especially for PS which has been flat in recent years.

Demand growth for expandable (PS) and ABS is higher, but is unlikely to result in a strong demand growth for SM, he said.

Around 31% of SM in China goes into EPS, 29% into PS, 17% into ABS and the remaining 23% into other products.

From 2008 onwards, the growth rate of SM in China will remain around 5%, compared to above 20% seen in 2000 and 2003, said Akiyama.

This stable growth would be insufficient to absorb all the additional capacities coming onstream in Asia and the Middle East (see table), he said.

While SM demand in China will continue to grow, the market would be oversupplied with all the new capacities coming out in Asia and the Middle East, he said, cautioning that Asian SM producers who are non-integrated would be hardest hit as it would be difficult to obtain feedstock at economical prices consistently,

The following table highlights the additional capacitates coming on stream in Asia and the Middle East by 2010.

Year	Project	Location	Time	Capacity (1,000 tonnes)
2007	Garson Hainan	China	January	80
	Samsung-Total	Korea	June	200
	FCFC	Taiwan	February	600
	CP-Chem	S.Arabia	End	777
	Pars	Iran	End	600
2008	Shuangliang	China	Q1	210
	Sichuan Meifang	China	Mid	200
	TSMC	China	Mid	350
	SECCO	China	Mid	150
	Lotte	Korea	Mid	150
	Kuwait SM	Kuwait	Q4	450
2009	Dushanzhi	China		320
	Jilin	China		210
	Qatar PC	Qatar		600
2010	ZRCC	China		620

Source: Nihon Oxirane

By: Clive Ong
+65 6780 4359

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