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Rise in global demand for polystyrene and expandable polystyrene is led by demand from Asia Pacific

Rise in global demand for polystyrene and expandable polystyrene is led by demand from Asia Pacific

Polystyrene is a widely used plastic that can be encountered in many situations in everyday life. Ceresana has forecast global demand for polystyrene to rise by, on average, 2.3% pa. Global demand is expected to increase at higher growth rates during the next couple of years than in the past. Growth rates, however, will be lower than that expected for the economy as a whole. Development of the worldwide polystyrene market will nonetheless continue to be closely linked to the future development of the global economy. The most important determinants of demand development are: Population growth, urbanization, a change in household structures, and an increasing middle class, in combination with rising private consumption, in emerging countries in particular. The global economy will continue to recover during the next few years and thus provide the general framework for a moderate increase of polystyrene consumption. Yet, demand for polystyrene will not rise as dynamically as demand for other standard plastics due to a change in technologies and advancing substitution processes. Revenues generated with polystyrene are likely to rise to approx. US$26 bln in 2020. Almost every second ton of polystyrene is processed in Asia-Pacific. Thus, this region is the most important sales market, followed by the industrialized regions North America and Western Europe. Ceresana forecasts the focus of polystyrene demand to continue to shift towards Asia-Pacific, at the expense of saturated industrialized markets in North America and Western Europe. Emerging countries, on the other hand, are profiting from a continuous increase of wealth and a moderate population growth. Even though Asia-Pacific is expected to expand its position as worldwide largest consumer, Africa, the Middle East, Eastern Europe and South America are also projected to develop at dynamic growth rates. In the past, capacity utilization of polystyrene plants averaged at only about 75%. This resulted in a, in part, considerable reduction of capacities and restructuring undertaken by manufacturers. Industrialized countries in Western Europe and North America, as well as Japan and South Korea have responded to the excess capacities by reducing production volume and refocusing on growth markets. By now, manufacturers are more focused on quality than on quantity. Important characteristics of polystyrene, e.g. surface gloss, impact resistance, resistance to stress cracking or flow properties are to be optimized, thus allowing for an increased range of application. In order to satisfy the rising global demand, however, production capacity has to increase again. Global capacity is scheduled to be expanded by 700,000 tons until 2020. More than 90% of these new capacities will be created in Asia-Pacific. The packaging industry in particular consumes a large amount of polystyrene, in the sub segment food packaging in particular. Additionally, polystyrene is often used in the casings of monitors, televisions, printers, and other electrical devices as well as consumer goods. Individual application areas for polystyrene are projected to develop at highly similar growth rates during the upcoming eight years. Ceresana forecasts the highest growth rates for the segment electrical & electronics; market volume is projected to increase by, on average, 2.8% pa. Development in the packaging sector will be only slightly less dynamic. As a consequence, E&E applications will account for approx. one third of global demand for polystyrene in 2020.

Demand for polystyrene and expandable polystyrene (EPS) is rising within developing countries such as China, India, Iran, Saudi Arabia and Brazil, according to Global Business Intelligence Research. Asian consumption of all types of polystyrene is forecast to increase at an average annual rate of slightly over 3% during 2010-2015, while North American demand is expected to decrease 0.5% and Western Europe will show only modest growth of 1.6% over the next five years. In the forecast period of 2010-2020, the global demand for polystyrene and EPS is expected to grow at a CAGR of 4.7%, increasing the overall demand for polystyrene and EPS to 23.5 mln metric tons by 2020. Asia-Pacific region was the major consumer for polystyrene and expandable polystyrene in global market in 2010, with a demand share of 53.4%. With the fast growing economy of China, Asia-Pacific dominance in the global polystyrene and expandable polystyrene market is expected to increase further, to achieve 62.8% of the global demand share by 2020. With growth in the developing countries of Iran and Saudi Arabia, the Middle East is expected to retain its demand share of 1.7% by 2020. Due to the comparatively slower demand growth from all other regions, their demand shares are expected to decline in the forecast period. The global polystyrene market saw a marginal net decline in demand over the past decade, whereas global EPS demand grew at a CAGR of 5.5% during the period 2000-2010. Major portion of this demand growth came from China, which consumed more than half of the global EPS demand in 2010. China’s demand for EPS is expected to continue to increase at a high rate over the forecast period, while other developing countries are expected to support the overall growth. Therefore, during the forecast period 2010-2020, the EPS demand is expected to increase at a CAGR of 7.3%, compared to polystyrene’s expected CAGR of 2.8% during the same period. Packaging was the dominant end-use sector for both polystyrene and expandable polystyrene globally. The packaging industry consumed 41.5% of global polystyrene demand and 47.9% of global expandable polystyrene demand in 2010. After packaging, the construction industry was the second major polystyrene consuming industry, accounting for 47.8% of EPS and 7.7% of polystyrene consumption at a global level, along with furniture and building industries. These two industries are expected to drive the global demand for polystyrene and expandable polystyrene in the forecast period as well. 

Styrenics consumption is estimated to be 35,007 kilotons in 2013 and will grow by 4.81% annually till 2018, as per reportsnreports.com. The increasing demand of styrenics in Asia-Pacific, especially in China, and growth in end-user applications such as construction and automotive industry are key factors driving the global market. Polystyrene (PS) is the major polymer which is largely consumed, followed by Acrylonitrile Butadiene Styrene (ABS) and Expanded Polystyrene (EPS). Properties of PS and EPS make it suitable for a wide variety of applications such as construction, packaging, consumer goods, etc. Automotive industry is the major consumer of Styrene Butadiene Rubber (SBR) particularly in tire manufacturing. Unsaturated Polyester Resin (UPR) has its applications in pipes & tanks, marine accessories, wind energy, etc. Asia-Pacific is driving the styrenics market, contributing more than 50% of the global demand. The other drivers include high growth in wind energy applications of UPR and increased SBR demand due to tire labeling regulations. Due to cost and performance advantages, UPR is widely used in the manufacturing of wind blades, rotors, ventilators, etc., thus ensuring high growth in wind energy applications. Similarly, tire labeling regulations, being adopted by different countries such as Germany, Japan, etc., has led to an increased SBR demand worldwide, especially in the automobile industry. Increasing environmental and health concerns due to usage of styrene and acceptance of other resins as substitute to Unsaturated Polyester Resin (UPR) were identified as major restraints. At present, their impact on the market is relatively high. However, emerging economies and innovations in products will create growth opportunities for styrenics in the near future. Companies producing or planning to produce styrenics in the near future are opting for expansion by introducing new facilities and increase in capacity. The market is a highly diversified market consisting of different types of polymers, each having wide range of applications. Due to this, there are large numbers of players operating in the market engaged in the manufacturing of different styrene-based products for different applications.

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