The growth rate of production capacity far exceeds the downstream expansion rate The styrene industry has entered a painful period

　　2021 is a year of earth-shaking changes for the styrene industry. The substantial release of new production capacity, while the market discourse power continues to increase, the operating timeline of device losses is also constantly lengthening, the industry has entered a painful period of development, and the market share battle will become more and more intense.

　　Capacity grows wildly

　　In 2021, the new plant will be put into operation and the old unit will be expanded, and the styrene production capacity will grow barbarically. As of November, China's styrene production capacity was 14.512 million tons, an increase of nearly 20% over the end of last year.

　　Supported by the release of new plant capacity, styrene production continues to refresh the highs. As of the end of October, the total domestic styrene output this year exceeded the 10 million tons mark, an increase of 26% year-on-year. Among them, the monthly output in May exceeded 1.1 million tons, the highest in the whole year. However, the expansion of the styrene industry has not stopped. According to statistics, there may be 650,000 tons / year of new production capacity released in December, and there are more than 2 million tons / year of new production capacity originally planned to be put into operation in the fourth quarter of this year, which has been postponed to the first half of 2022 for various reasons. It is estimated that from 2022 to 2026, The proposed production capacity of Styrene in China will reach more than 10 million tons.

　　The loss period is lengthened

　　With the continuous increase of domestic production capacity, styrene imports showed a downward trend. From 2017 to 2020, China has imported a total of 12.1992 million tons of styrene, which is a net importer. But this year has changed, in the first 10 months, China's total styrene imports were only 1.4271 million tons, down 42.98% year-on-year.

　　At the same time, due to fierce market competition, weakened bargaining power, increased buyers' right to speak, and the loss period of styrene industry was lengthened. Since June this year, the price difference between styrene and raw materials has been narrowing to within 1,000 yuan (ton price, the same below), and even sometimes only 300 to 500 yuan, which is rare in the history of styrene, and was basically maintained at 2,000 to 2,500 yuan before. In particular, most of the non-integrated styrene plants fell into a loss situation and continued until the end of the year, during which some enterprises could not bear the burden of high costs and chose to reduce the burden or extend the parking cycle, and the industry operating rate remained relatively low for a long time.

　　The "right to speak" weakens

　　At present, China has become the fastest growing country in the world's styrene consumption. In the past two years, with the new infrastructure of the "Belt and Road", styrene and downstream have been revitalized. As of 2021, China's apparent styrene consumption is expected to reach 14 million tons; from 2017 to 2021, China's styrene apparent consumption is expected to grow at an average compound growth rate of 6.51%. That said, the downstream expansion rate is much slower than the styrene industry. In 2021, the mainstream downstream polystyrene (PS) industry of styrene has not been put into production so far; the new capacity of the acrylonitrile-butadiene-styrene copolymer (ABS) industry has increased by 450,000 tons/year; and the new capacity of renewable polystyrene (EPS) has increased by 320,000 tons/year. It can be seen that the downstream production increase of styrene mainstream is small.

　　With the increase in the supply of raw materials, styrene's "right to speak" in its industrial chain weakens, from low cost to high cost, while the mainstream downstream maintains a good profitability.

　　There are still opportunities in the future

　　But there are also important opportunities for the styrene industry in the future. According to statistics, from 2022 to 2026, there are about 18 sets of PS devices totaling 4.76 million tons / year, 16 sets of 7.245 million tons / year ABS devices, 12 sets of 2.59 million tons / year EPS device new production capacity will be put into operation, when the demand for styrene will increase significantly, but in the end, how much the styrene industry can be boosted depends on the landing of these projects. (Shi Xuan)