A review of the Word Polystyrene business and concluded that solid polystyrene is undergoing a phase of very slow growth while EPS has recovered and doing well, as per Chemical Market Associates, Inc. (CMAI). This has caused reorganization of the polystyrene business, particularly in North America and Europe. In North America, all but one of the top six polystyrene producers are expected to exit their business or create joint ventures, ushering a new era of fewer but larger and more integrated producers. Expandable Polystyrene (EPS), on the other hand has enjoyed solid demand growth on a global basis. As a result, the restructuring in styrenics in the mature regions has generally left EPS unscathed.
The markets are growing well in Asia particularly in China. In fact, China almost accounts for over 30% of global demand in 2006. While most of the excess capacity continues to get rationalized, new capacity emerges in Asia and the Middle East.
The lack of demand growth is now endemic in the polystyrene business. Polystyrene stands out amongst the major thermoplastics and other styrene derivatives as the most challenged product in terms of growth. There are some areas of growth, but the markets in general remain well below peak volume levels. Therefore, it is more or less expected that the polystyrene markets in the developed areas such as Japan, Western Europe and North America should be in decline since many end uses have already migrated offshore to lower labor cost countries such as China. However, Asia is not growing either and Northeast Asia has seen demand decline for four years in succession.
The world EPS market made a spectacular recovery in 2006 and is performing very strongly again in 2007. Almost every major market in the world did well, the notable exception being North America and Southeast Asia. Attributable to strong regional economic growth, the best performer of the major markets was Western Europe which was one of the laggards during the preceding three years. Europe outperformed China in terms of growth, but China remains the largest market in the World. In the case of EPS, persistently high energy prices have kept energy conservation and insulation, two properties playing to EPS strength, high on the agenda.
China remains the largest market with 32% of world demand, with domestic demand growth substantially driven by the construction sector. Growth in the packaging sector is more closely related to world GDP growth and China's exports of finished goods. China has recovered from the 2005 contraction and is expected to continue to enjoy healthy growth, currently assumeing a new role as one of the major exporters to the World market. CMAI experts forecast China to account for over 50% of global growth on average through 2012 raising its market share to 35% by the end of the forecast period.
The markets are growing well in Asia particularly in China. In fact, China almost accounts for over 30% of global demand in 2006. While most of the excess capacity continues to get rationalized, new capacity emerges in Asia and the Middle East.
The lack of demand growth is now endemic in the polystyrene business. Polystyrene stands out amongst the major thermoplastics and other styrene derivatives as the most challenged product in terms of growth. There are some areas of growth, but the markets in general remain well below peak volume levels. Therefore, it is more or less expected that the polystyrene markets in the developed areas such as Japan, Western Europe and North America should be in decline since many end uses have already migrated offshore to lower labor cost countries such as China. However, Asia is not growing either and Northeast Asia has seen demand decline for four years in succession.
The world EPS market made a spectacular recovery in 2006 and is performing very strongly again in 2007. Almost every major market in the world did well, the notable exception being North America and Southeast Asia. Attributable to strong regional economic growth, the best performer of the major markets was Western Europe which was one of the laggards during the preceding three years. Europe outperformed China in terms of growth, but China remains the largest market in the World. In the case of EPS, persistently high energy prices have kept energy conservation and insulation, two properties playing to EPS strength, high on the agenda.
China remains the largest market with 32% of world demand, with domestic demand growth substantially driven by the construction sector. Growth in the packaging sector is more closely related to world GDP growth and China's exports of finished goods. China has recovered from the 2005 contraction and is expected to continue to enjoy healthy growth, currently assumeing a new role as one of the major exporters to the World market. CMAI experts forecast China to account for over 50% of global growth on average through 2012 raising its market share to 35% by the end of the forecast period.
