14 March 2008 16:47 [Source: ICIS news]
By Isha Jha
MUMBAI (ICIS News)--Demand for polystyrene (PS) in ?xml:namespace>
White goods include major household appliances such as stoves and refrigerators that are typically finished in white enamel.
“The changing lifestyle, which has resulted in an annual growth of about 15% over the last two-three years in the white goods industry is causing increased demand for polystyrene,” a producer said.
“The demand for both GPPS [general purpose polystyrene] and HIPS [high impact polystyrene] is expected to grow by a little less than 8% each,” another producer said.
“The demand in 2007 for PS was about 280,000 tonnes, less than the estimated 325,000 tonne, out of which 45% was for GPPS and 55% for HIPS,” he said.
“PS demand has been growing over the last one and a half years mainly driven by the nation’s GDP [gross domestic product] growth,” he said.
Most of the demand in polystyrene comes from the colour tv and refrigerator industry which grew 15% and 8% respectively in 2007, a producer said.
The total installed PS capacity in 2007 was 397,000 tonne/year, out of which about 80% was manufactured.
Another producer said, “PS demand would rise by as much as 8-10% due to the increase in white goods industry and the favourable shift in cost balance towards PS compared with PP.”
In mid 2006 and 2007 the cost of PS was about $50/tonne higher than polyproplylene (PP) and border-line applications shifted towards PP, but now the cost difference has reversed and PP is $50/tonne higher than PS, he said.
Due to this reversal, most producers are contemplating a shift back to PS-based applications, which would heavily pull the demand in 2008.
However, another producer felt that the demand for PS would remain flat in 2008.
“Over the past years consumers were shifting to PP from PS for border-line applications like moulding and plastics, mainly because PP was cheaper and had similar properties, therefore resulting in a slight fall in PS demand,” he said.
Due to this shift, the PS market in
"GPPS is expected to cost $1200 [€768]/tonne lower than the current $1300/tonne and HIPS is expected to come down to $1250/tonne from $1350-$1400/tonne," he added.
According to him, the overall commodity prices are estimated to fall slightly by late second quarter in June because of an expected correction in the
The PS sector is not expected to see any new capacity addition in the coming few years as companies are not investing in the commodity because of high benzene and styrene monomer feedstock costs.
“The cost of manufacturing PS is getting higher but companies can not realize the price from the market as cheaper alternatives are available,” he added.
($1 = €0.64)
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