In the end, consumption of styrene depends on the demand of consumers for the different styrene based products. Thus, emerging countries exhibiting strong economic growth and a rising income offer a considerable potential. Conditions as propitious as these attract investment in the expansion of the downstream styrene industry. On the long term, this will lead to an establishing of an ever larger part of the value creation chain in these countries. As result, demand for styrene in some countries will rise significantly.
An example for a development of this kind was and is China. During the past eight years, demand for styrene in this country rose by 9.6% per year. Thus, China is the worldwide largest sales market, accounting for about 31.5% of market shares in 2012. The USA followed at a considerable distance, after demand for styrene fell by, on average, 1.9% p.a. since 2004.
Global production of styrene is increasingly relocating to emerging countries, while developed industrialized regions considerably reduced capacities in the last few years. This is especially true for Western Europe and the USA. This shift was triggered by a previous excessive increase of production capacity at a time when demand for styrene rose at less dynamic rates or even declined in the aftermath of the global economic crisis. An effect of this process was the decline of global capacity utilization to 75% in 2009. While production capacities were relocated, degree of global capacity utilization rose again. This development is likely to continue; we forecast the highest relative increase of styrene production until 2020 to occur in South America and the Middle East. The production capacity in these countries with extensive crude oil resources will increase to approx. 4.8 million. Ceresana expects output in South America to increase by, on average, 13.4% p.a. during the next eight years.