China Styrene Export Pattern Analysis
In the past five years, the global styrene capacity increased continuously, and the capacity growth was mainly in China. The growth in China’s capacity led to declines in the country’s styrene imports and increases in styrene exports. The global styrene flow changed gradually due to changes of styrene supply-demand balance in China and other countries such as Europe, the U.S., South Korea and India. Meanwhile, changes of currency exchange rates and the transportation industry influenced the global flow of feedstock benzene. This showed that companies paid more attention to international market and the ability to confront business risks.
With the commissioning of many large units in recent years, China’s domestic self-sufficiency rate improved, and China-origin goods replaced part imported goods. Global resources began to redistribute, and China-origin styrene resources will also compete with global sources from net export countries other than China, such as South Korea, the Middle East, the U.S., etc. Geographically, the coastal enterprises in northern China, which were closer to South Korea and Japan, may compete directly with resources from North America. Coastal resources in East China, which could be supplied to Taiwan of China and Hongkong of China, may compete with resources from the Middle East. Coastal resources in South China, which could be supplied to Vietnam, Pakistan and India, may compete with resources from Southeast Asia. In addition to the coastal styrene enterprises involved in exports, it is expected that inland enterprises will also participate in the export market in the future.
Judging from the registered places of China’s styrene export enterprises in the past two years, the number of regions involved has increased, indicating that more and more enterprises have participated. In 2022, provinces such as Liaoning, Sichuan, Guangdong and Tianjin were added in the styrene exports. In addition, the export volume in Zhejiang, Shandong, Shanghai and Fujian went up. According to the rough judgement of the registered place of the enterprise, the enterprises participating in the export include Hengli Petrochemical, Liaoning Bora Chemical, Fujian Tianyuan Chemical, Tianjin Bohai Chemical Industry Group, Ningbo ZRCC Lyondell Chemical, SP Chemicals, Wanhua Chemical Group, Qingdao Haijing Chemical (Group), Sinochem Quanzhou Petrochemical and Fujian Gulei Petrochemical. The enterprises participating in the export are all located in the coastal area. Convenient transportation has also become a competitive advantage for enterprises in the styrene industry. Enterprises either directly participated in export transactions or through traders. Enterprises and trade complemented each other and jointly transmitted China’s increased supply to suitable places.
In 2023, the main export partners include South Korea, Vietnam, Hong Kong of China, Ecuador, Türkiye, India, the United Arab Emirates, etc. The main import partners include Saudi Arabia, Singapore, Japan, Kuwait, the Netherlands, and Taiwan of China.
According to import and export data from January to July 2023, it is expected that the annual import volume this year will be around 800kt, a Y-O-Y decrease of about 50%. The export volume is expected to be around 400kt, a Y-O-Y decrease of 29%. The continuous decline in import volume is in line with expectations, but exports have not achieved sustained growth, mainly due to the prolonged closure of China-foreign arbitrage windows in the first half of the year, as well as domestic demand growth brought about by newly added downstream capacity in China.
It is expected that the export volume will steadily increase within a narrow range in the next five years. On the one hand, it is anticipated that capacity growth in the styrene downstream industries would outpace styrene over the course of the next five years, particularly in the ABS and PS sectors, which will result in continued increase of domestic demand. On the other hand, the oversupply of styrene will make some producers to export for higher earnings. It is anticipated that China’s styrene exports may rise to 600kt or so.
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