Sinopec Li Guodong: The Styrene Industry's Earnings Are Expected To Shrink Sharply In The Next Five Years

- Jul 01, 2019-

Li Guodong, deputy manager of the Organic Chemicals Department of East China Branch of Sinopec Chemicals Sales Co., Ltd., said that styrene products have long been called “devil products”, mainly because of the low production capacity of domestic styrene before 2018, which can not meet the needs of the domestic market. Imports directly affect the price of the market. From 2014 to 2018, the import volume has decreased year by year, and the import dependence in 2018 has been lowered to 26%.

In terms of production capacity, from 2014 to 2018, domestic styrene production capacity increased from 6.95 million tons to 9.21 million tons, and the capacity increased by 32.5%. In terms of apparent consumption, domestic apparent consumption in 2014 was 8.42 million tons, and in 2018 it increased by 2.6 million tons to 11.02 million tons, an increase of 30.9%. The growth of production capacity and consumption is basically the same, and the operating rate has increased year by year, from 67.48% in 2014 to 88.06% in 2018.

Li Guodong introduced, in terms of price trends, looking at the Jiangsu styrene market in the past five years, the price operation range in 2014 was 6400-12100 yuan / ton, 2015 6600-11200 yuan / ton, 2016 7700-10900 yuan / ton, 2017 8180 - 12,000 yuan / ton, 7750 - 14,000 yuan / ton in 2018. CFR China and domestic styrene price trends are consistent, and styrene is highly correlated with the main raw material pure phenyl.

For the supply and demand of domestic styrene in 2019-2023, Li Guodong made a prediction. He believes that with the opening of Zhejiang Petrochemical 1.2 million tons at the end of 2019 and the China Shipping Sea Shell, China Quanzhou and Gulei petrochemical plants in 2020, the domestic supply and demand pattern of styrene Significant changes are expected and imports are substantially reduced. After entering 2020, the styrene trade pattern across Northeast Asia is expected to undergo fundamental changes. That is, in the next five years, the styrene market will shift from the seller's market to the buyer's market, and the industry's earnings are expected to shrink sharply.