Since 2006, the new Asian styrene plant has been put into operation. The Asian plant's competitive advantages in terms of scale, technology, and most of the raw materials have begun to appear. In North America, styrene production capacity has exceeded 1 million tons per year. In the past, these capacities were mainly used for exports to Asian and South American countries. With reductions in exports and slow economic growth in the region, and the inability to digest these capacities, the reduction in North American styrene overcapacity seems to be imperative.

This trend was recently confirmed by a market news. According to China Chemical Online (), a market analyst predicted on July 27 that North American styrene production capacity should be further adjusted.

Although the specific details of North America's capacity adjustments have not yet been disclosed, it is estimated that it should be a direct shutdown of the excess capacity of 1 million tons/year. If this incident really happens in the near future, then it can be said that this North American styrene production capacity adjustment is actually a concrete manifestation of the development trend of the global styrene region in recent years, that is, Europe and the United States and Asia, Japan and other regions are constrained by their own economic development speed. Styrene production and demand growth is almost at a standstill.

Some forecasts indicate that by 2010, the annual demand for styrene in Europe, America, and Japan will grow by less than 1%, and the new capacity after 2006 will be almost zero; and in addition to the Asian countries outside Japan, especially China, under the influence of rapid economic development, styrene The production and demand growth rate is alarming. Taking China as an example, in 2001, the demand for styrene was only 2.28 million tons. By the end of 2005, the annual demand had exceeded 4 million tons, and the average growth rate had reached 15%. After the end of 2006, the new production capacity has been confirmed to have reached 800,000. T/year includes the 300,000 t/y installation of Dushanzi Petrochemical and the 500,000 t/y installation of Guangzhou Petrochemical in 2007. All this shows that Asia has replaced Europe and the United States as a new styrene production and consumption center.

According to the latest statistics from China Chemical Online, the existing styrene production capacity in North America is around 6.8 million tons per year. The proposed reduction of 1 million tons of production capacity accounts for 17% of the existing 6.8 million tons/year of North American production capacity. The large proportion of this surprises us. Do North American styrene companies have the ability to reduce this amount of production at once? I don't think this is a concern, because it is a countermeasure taken by North American styrene production companies to address the global styrene development trend. In fact, these companies are already well-prepared and we can understand whether the world's major styrene producers are investing in China in recent years.

In 2005, China imported 2.81 million tons of styrene, of which only 210,000 tons from North America, mainly from Japan and South Korea and other large exporters of styrene in Asia. With the difficulty of directly exporting styrene to China, major European and American companies have long changed their tactics. They have built production capacity in Europe and the United States to China, built factories directly in China, and directly participated in China's market competition. These European and American companies are the world's leading styrene producers and have strong financial and technological capabilities. Their joint venture plants in China are world-class manufacturers. For example, Shanghai SECCO's styrene plant with 50% of BP's investment was put into operation in March 2005. With a production capacity of 500,000 tons/year and a 50% stake in Shell, which was put into operation in February 2006, China National Offshore Shell styrene plant has achieved a production capacity of 560,000 tons/year. At this point, the two largest styrene enterprises in mainland China are joint ventures. Their production capacity has accounted for nearly 40% of China's total styrene production capacity, which has also led to a complete change in the pattern of China's styrene industry. These foreign companies have succeeded in occupying a place in the styrene market in Asia, especially in China. It can also be said that it is possible to shut down North American styrene production capacity that has been surplus.

With the global demand for styrene still growing, North American companies such as BP, Shell, and other petrochemical giants, in the absence of local demand in North America and declining exports, quickly adjusted to market changes to reduce or transfer surplus production capacity. It is inseparable from the company’s ability to grasp market development trends and its strong financial and technological strength. These are the places where our styrene companies should learn.

In today's globalization, constantly developing foreign markets is also a manifestation of corporate development and strength. Although it is now predicted that China's styrene supply will not be able to meet demand in 2010, domestic styrene will not encounter the problem of overcapacity for the time being, but in the international market. Large-scale domestic companies have invested more in building factories, and Asian, Japanese, and Korean imports have continued to enter. Styrene enterprises in China, especially those other than the three major oil giants such as Sinopec, have already faced pressure from product sales, reminding us to start Faced with these challenges.

In general, the 1 million tons/year capacity to be reduced in North America is based on the continuous production capacity of overseas investment and construction. In today's increasingly integrated global economy, the adjustment of styrene production capacity in North America is closely related to the development of Asia's styrene industry in Asia in particular. It should be regarded by the Chinese styrene enterprises as a challenge or an opportunity. We will wait and see.

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November 01, 2023