Sheng Hao Austrian CEO said that a variety of factors hinder the European and American companies to increase styrene production capacity.
The profits of styrene have been restored, but so far only Ineos Benz considers building a new styrene plant in North America or Europe. The company will conduct engineering studies on world-class styrene installations along the US Gulf Coast.
Other styrene producers have not yet announced any plans. Sheng Shengao has always stressed that the company does not have plans to build a styrene plant, whether it is its own or its joint venture.
At the American Chemical Council (ACC) annual meeting, Trinseo CEO Chris Pappas gave several reasons.
He said that although styrene profit has rebounded, it still cannot sustain high investment in new capacity.
The major styrene producers recently completed the industrial restructuring and shutdown.
The United States has become a net exporter of styrene and there is no demand for new capacity. If the United States adds styrene capacity, most of it will be exported.
If a manufacturer builds a new installation in the United States, then after paying for export products and the cost of importing pure benzene, the company still needs to make enough profits to prove the feasibility of the investment. Although there is more styrene supply in the United States, the lack of pure benzene requires import.
On the demand side, Trinco expects an annual growth rate of 2.3%. This is due to the fact that styrene derivatives are widely used in various markets.
These derivatives include SSBR, ABS, SAN and PS.
SSBR is used to produce tires with better performance so that the car meets stricter fuel efficiency standards.
Similarly, ABS and other resins can reduce vehicle weight and fuel efficiency.
Tim Stedman, senior vice president, said that as automakers plan to develop electric vehicles, fuel efficiency is becoming more and more important. Batteries limit the range of use of these cars, so reducing the weight allows them to charge and drive further away.
In medical applications, styrene polymers can be used in PS and ABS blends, which can withstand a variety of sterilization cycles.
Electronic products are another terminal market.