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Large projects have been launched
In 2003, the world's styrene demand was 23 million tons. In 2004, 2005 and 2006, it was 23.51 million tons, 24.42 million tons and 25.06 million tons respectively. During this period, the Asian region grew fastest, from 10.082 million tons in 2002 to 13.28 million tons in 2006, with an average annual growth rate of 6.2%. Among them, the growth rate of Japan and South Korea is -0.1%, China is 16.9%, and Southeast Asia is 4.3%.
The rapid growth of demand in Asia, especially China, has stimulated the launch of new styrene projects. According to statistics, the new styrene capacity started in 2006 was 1.9 million tons/year, including 565,000 tons/year of CNOOC/Shell Petrochemical Company in Daya Bay. In addition, some large styrene expansion projects and Brazil's Innova will expand their styrene plant capacity. By mid-2008, styrene production capacity will double to 500,000 tons/year. Saudia Petrochemicals (Sadaf), which is a joint venture between Shell and Sabic, also invests in styrene expansion. In the first half of this year, the company built a 600,000-ton/year styrene plant in Jubail, which is the third styrene plant of the joint venture.
Market will oversupply
Analysts believe that the global average growth rate of styrene demand is about 1.5 times GDP growth, which is about 4.5%, which is equivalent to about 1.11 million tons of new demand each year, which is lower than the planned increase of annual output of 1.6 million tons. Judging from the announced new construction and capacity expansion projects, most of the global styrene new installations will be built in Asia and the Middle East over the next 3 years. It is expected that the newly added capacity will make the global styrene operation rate peak since the 1980s. The value dropped from more than 90% to about 80% in 2008.
Analysts believe that the oversupply situation is expected to peak in 2008 and will begin to ease again, but the low efficiency of styrene production will continue beyond 2010.
China's supply and demand will tend to balance
As of 2006, there were more than 20 major companies producing styrene in China, with a total capacity of 2.869 million tons/year, accounting for approximately 12% of the world's total production capacity. Of these, 11 sets are imported devices, with a production capacity of approximately 2.1 million tons/year, accounting for approximately 73.2% of the total domestic production capacity.
The United States Ewing Management Group announced on August 1 this year that it had completed the acquisition of the Chinese styrene producer Dongsheng Chemical Company. Through this acquisition, Ewing Management Group holds 80% of the shares of Tung Yu Chemicals, and the remaining 20% ​​are held by Chinese investors. Dongsheng Chemical has a 210,000-ton/year styrene plant in Changzhou and is currently expanding its capacity. It plans to add 200,000 tons/year of production line and it will be completed by the end of 2008.
Ewing Management Group, headquartered in Dallas, United States, focuses on the acquisition and management of production or asset-intensive industrial companies. The acquisition of Tung Yu Chemicals is the first large-scale investment in China.
In recent years, with the increase of production capacity, China's styrene production has also been increasing. In 2004 and 2005, the output reached 990,000 tons and 1.25 million tons, respectively. In 2006, the output reached 1.942 million tons. The apparent consumption of styrene in China is also growing. In 2003, this figure was 3.6 million tons, in 2004 it was 3.87 million tons, in 2005 it was 4.05 million tons, and in 2006 it was 4.26 million tons. The total demand for styrene in 2007 is expected to reach 4.6 million tons in 2010. About 580 million tons. From 2007 to 2010, China's styrene production capacity is still in a period of large-scale growth. Some new construction and expansion projects will continue in succession. By then, China's styrene production capacity will reach approximately 6 million tons/year, and supply and demand will basically reach a balance or a slight gap.
Global styrene market is facing oversupply
The demand for styrene in the world has continued to increase in recent years, spurring all regions to invest in new devices. DeWitt of the United States recently issued an early warning that the growth of global styrene production capacity has far exceeded the expected increase in demand. In the coming years, the styrene market will show an oversupply situation.