China’s Polystyrene Production Expansion to Be Delayed Amid Energy Crisis
IndexBox has just published a new report: ‘China – Polystyrene in primary forms – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.
In 2021-2022, China plans to add a new production capacity for styrene and polystyrenes. This could turn China from the world’s largest importer of those products into an exporter. Completion may be delayed due to electricity disruptions caused by increasing energy prices and regulations to reduce CO2 emissions. Despite the ban on single-use packaging, consumption of polystyrene in China will steadfastly grow, driven by a high demand for plastics in the construction, automotive and other industries.
Key Trends and Insights
China is the largest consumer and importer of polystyrene in the world. In 2020, the country imported 1,36M tonnes of primary polystyrene (nearly 20% of overall global imports) worth $1,43B.
According to industry publications, in 2021-2022 new factories for polystyrene and ABS plastics are expected to launch with a combined capacity of over 3.5M tonnes, including new facilities for the companies Sinopec Gulei, Zhejiang Petrochemical и Shandong Lihuaya. If these projects are completed, China may turn from a styrene importer into an exporter as the new capacity would surpass 2.8M tonnes or the current level imports (IndexBox estimates).
The energy crisis in China could delay the completion of these projects. Beijing’s environmental protection policies have led the provinces to limit energy consumption to stay within yearly quotas. They are also diminishing manufacturing operations, including at chemical factories that use coal for power generation. To decrease greenhouse gas emissions, China must limit coal usage, but this will cause costs to increase for energy-intensive production methods.
Despite the ban on single-use polystyrene tableware and packaging in China, demand for this polymer will consistently rise. The majority of the product is used for producing Styrene-butadiene, ABS and other forms of plastics for the construction, electronics and automobile industries. Rapid developments in these sectors will drive demand for polystyrene.
China’s Imports of Polystyrene in Primary Forms
In 2020, imports of polystyrene in primary forms into China expanded to 1.4M tonnes, increasing by +3.8% on the previous year’s figure. In value terms, polystyrene imports dropped from $1.6B in 2019 to $1.4B (IndexBox estimates) in 2020.
Taiwan (Chinese) (311K tonnes), Malaysia (204K tonnes) and Hong Kong SAR (177K tonnes) were the leading suppliers of polystyrene imports to China, together accounting for 51% of total imports. South Korea, Singapore, Japan, Iran and Thailand lagged somewhat behind, together accounting for a further 36%.
In 2020, the most notable rate of growth in terms of purchases amongst the leading suppliers was attained by Iran (+71.3% per year), while imports for the other leaders experienced more modest paces of growth.
In value terms, the largest polystyrene suppliers to China were Taiwan (Chinese) ($369M), Hong Kong SAR ($209M) and Malaysia ($175M), together accounting for 52% of total imports. These countries were followed by South Korea, Japan, Singapore, Thailand and Iran, which together accounted for a further 35%.
The average polystyrene import price stood at $1,055 per tonne in 2020, waning by -13.1% against the previous year. Average prices varied somewhat amongst the major supplying countries. In 2020, the highest prices were recorded for prices from Taiwan ($1,186 per tonne) and Japan ($1,180 per tonne), while the price for Malaysia ($856 per tonne) and Iran ($863 per tonne) were amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Hong Kong SAR, while the prices for the other significant suppliers experienced a decline.
Source: IndexBox Platform