China SM capacity build-up drives Asia industry rationalisation
Clive Ong
27-Feb-2014
By Clive Ong
SINGAPORE (ICIS)–China’s strong build-up of styrene monomer (SM) capacity over the years has been the driving force in the ongoing regional petrochemical sector rationalisation, whereby older production facilities are being retired, industry sources said on Thursday.
By 2015, the country’s total SM is projected to reach 8.43m tonnes/year, about a 50% increased from 2010, according to Chemease, an ICIS service in China.
Over a four-year period to 2010, SM capacity in the country has more than doubled to 5.61m tonnes/year, the data showed.
China has been steadily building up petrochemical capacity with an aim towards self-sufficiency, given its humongous requirements. The country is the world’s second biggest economy and remains the biggest petrochemical importer in Asia.
With the strong growth in domestic SM capacity, China is now less reliant on import cargoes, but its consumption is continuing to grow, industry sources said.
SM is a liquid chemical used to make resins such as polystyrene (PS), expanded PS (EPS) and acrylonitrile-butadiene-styrene (ABS), as well as synthetic rubbers such as styrene-butadiene-rubbers (SBR) and styrene-butadiene-latex (SBL).
Outside of China, SM capacity growth in Asia has stalled, with a numbers of producers deciding to mothball their plants over the years, fearing the loss of China as a major buyer.
“Most SM makers in Asia have not expanded capacity in recent years while some have instead reduced their capacity,” a Taiwan-based SM buyer said.
In Japan, two producers have announced the impending closure of their SM facilities.
Nihon Oxirane will be shutting down its 425,000 tonne/year SM plant in Chiba by May 2015, while Asahi Kasei Chemicals has announced that its 320,000 tonne/year unit in Mizushima will cease operations in March 2016. (Please see table below)
“A deterioration in the supply-demand balance is expected, as the expansion and construction of large-scale plants in Asia are planned,” according to Asahi Kasei, which will keep its other SM plant with a 390,000 tonne/year capacity to exclusively cater to the Japanese domestic market.
China’s SM capacity growth is being support by demand, given the strong expansion in the downstream styrenics sector in recent years. The rest of Asia provides a stark contrast, with PS and EPS plants in the region either having to scale down or completely shut production.
“PS and EPS expansions are mostly in China as the key users are mostly there. The trend will likely continue into the foreseeable future,” a southeast Asia-based PS maker said.
Schedule of SM plant closures in Japan and China
Plant |
Location |
Capacity (tonnes/year) |
Remarks |
Asahi Kasei Chemicals |
Mizushima, Japan |
320,000 |
To shut in March 2016 |
Nihon Oxirane Co |
Chiba, Japan |
425,000 |
To shut in May 2015 |
Denka |
Chiba, Japan |
240,000 |
Shut in 2012 |
Mitsubishi Chemical |
Kashima, Japan |
371,000 |
Shut in 2011 |
|
|
|
|
Plant |
Location |
Capacity added (Tonnes/year) |
Remarks |
Taixin Xinpu Chemicals |
Jiangsu E. China |
320,000 |
August 2013 |
Keyuan Chemicals |
Zhejiang E. China |
100,000 |
2013 |
Dong Xing Chemicals |
Guangdong S. China |
60,000 |
End-2013 |
CNOOC |
Hainan S.China |
120,000 |
Aug 2014 |
Arbe Chemicals |
Jiangsu E. China |
500,000 |
End-2014 |
Dashu Chemicals |
Zhejiang E. China |
250,000 |
2015 |
Jiujiang Chemicals |
Jiangxi E. China |
80,000 |
2015 |
Jingmen Chemicals |
Hubei Central China |
80,000 |
2015 |
Fu De Neng Chemicals |
Jiangsu E. China |
500,000 |
2015 |
Shuangliang Chemicals |
Jiangsu E. China |
500,000 |
2015 |
CNOOC |
Zhejiang E. China |
600,000 |
2015-2016 |
Jinshan Chemicals |
Shanghai E. China |
600,000 |
2016 |
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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