Global styrene consumption in 2008 was about 26 mln tons. Some market research companies indicated an increase of 2.9% in styrene consumption in 2008 over 2007 figures, while others indicated that the market of styrene declined for the first time in 2008. Styrene market grew well from 2001 until 2007, but growth was weak in 2008. Slow down in global amid destocking through the entire styrene vale chain. Global capacity in 2008 was 30 mln tons, with capacity utilization pegged at 87% which can be considered healthy for profitability. Styrene capacity in Asia Pacific accounts for almost half of the global total. Following a minimal activity period of 2002-2007, styrene capacity development, particularly in the Middle East, entered an active phase in 2008. Recent capacity development has been concentrated in Asia Pacific and the Middle East. Capacity will continue to grow over the forecast period, but at lower rates than seen in the past. Most new capacity will be integrated with ethylene and benzene feedstock sources. While experts differ in growth projections, there is a general consensus that styrene will see growth in the next few years. Some experts believe that from 2009 to 2013 styrene will achieve an average growth of about 3-4%. Another market research optimistically forecasts 4% growth from 2008 until 2013, while less than 3% growths is forecast by another for the same period. 2008 Global Styrene Consumption Derivative MMT % PS 11.2 43 EPS 4.7 18 ABS/SAN 4 15 Styrenic Copolymer SB latex 1.5 6 SB rubber 1 4 Unsaturated - - Polyester resin 1.3 5 Others 2.3 9 Total 26 100 As per Chemsystems, Polystyrene has declined globally since 2005. However, it remains the largest styrene consumer at about 60%. EPS has shown a good growth and possibly the highest among all the derivatives of styrene due to good growth in protective packaging and construction sectors. EPS provides energy saving in buildings that is gaining more importance in the construction industry. Both ABS and SBR which grew strongly in 2006 and 2007, slowed down due to weaker demand from automotive and construction sectors in 2008. PS consumption in 2008 declined almost to the level of 2001, mainly due to higher feed stock prices along with the price volatility. A shift by many processors of consumer products to PP also negatively affected the growth of PS. However, the weak global economy in 2008 affected both PP as well as PS markets globally. Packaging, disposable cutlery and foamed PS (XPS) are still growth sectors for PS. The media closures sector has been hit by the increasing preference for digital music download sales, which have been growing at over 20% pa. The increase of digital music has severely impacted CD sales, and with it the use of polystyrene media enclosures. In developed markets, the packaging sector is the largest application area for PS. Its usage in food packaging has however remained stagnant due to the increasing preference for paper-based products which are promoted as being more environmentally friendly. XPS has also faced sustained substitution pressure from competing materials such as PP and PET, but there are some applications where PS is the first preference. To counter growing inter polymer competition, which is a major worry for PS growth, key producers of PS are developing applications such as high gloss PS moulded products to replace ABS in automotive sector. The Asia Pacific EPS market is around half of the global total. It faces competition in packaging sector from PE foam and paperboard products. High GDP growth rates around the Asia Pacific region and other trends such as urbanisation and increasing uptake of electrical appliances will support EPS demand, aiding its growth in Asia. EPS will remain the fastest growing of the major styrene derivatives. The driving forces are reduction in energy consumption in buildings which lead to use of EPS foam in building. EPS in packaging of electrical appliances will get boost in growth in Asia on account of increasing middle class population. EPS production is is dominated by Chinese and Taiwanese. Six of the ten largest producers globally are Chinese, with Loyal Chemical being the market leader, followed by Chinese Wuxi Xingda Group. Almost 25% of global capacity is held by three Taiwanese producers - Loyal Chemical, Ming Dih Chemical and Taita Chemical while BASF, a global player, holds a relatively very small share (just about 5-7%). Global ABS demand has been under pressure from inter-polymer competition from PP and recently from PS. They can compete at lower specification end products of the automotive sector. Electrical/electronic sector will continue to be a strong hold of ABS market. Asia Pacific, particularly China, will remain the largest consuming region for ABS. ABS even at lower growth rate in the next decade will be an important contributor to styrenic growth. It will drive the growth of styrenic group along with EPS. Plant expansions in Asia and the Middle East and softening demand in developed regions have led to styrene oversupply in the United States, Western Europe and Japan as per Sri Consulting.com. These changes have resulted in industry rationalization in styrene monomer and derivative capacity. During the next five years, major capacity additions for styrene will occur, mostly in China, the Middle East, and Central and South America. The major markets for styrene are polystyrene, acrylonitrile-butadiene-styrene (ABS)/styrene-acrylonitrile (SAN) resins, styrene-butadiene (S/B) copolymer latexes, unsaturated polyester resins and SBR elastomers and latexes. Styrene demand remains dominated by its main derivative, polystyrene (59%), which has reached maturity in most developed countries. Other styrene consumption was for the production of ABS/SAN (16%), S/B copolymer latexes (6%) and unsaturated polyester, accounting for an additional 6% of world styrene demand, while SBR and SBR latexes production accounted for 4% of world demand. The following pie chart shows world consumption of styrene: World styrene demand grew at an average annual rate of only 0.4% during 2003–2008. Rising raw material prices and weakened demand for polystyrene in the United States, Western Europe and Japan slowed overall styrene demand growth. Growth in these three regions will be flat to declining over the forecast period. The fastest styrene demand growth will be in China, the Middle East, Central and Eastern Europe, and Central and South America. Based on current capacity expansion announcements, the United States, Canada, Japan, Singapore, the Republic of Korea, and the Middle East will remain net exporters while Mexico, India, Thailand and other Asian countries will continue to be net importers to 2013. Capacity closures in the United States and Western Europe in 2009, and potentially into 2010, and continued capacity growth in China will gradually shift global supply closer to demand in Asia.