SUPREME PETROCHEM LTD.

I) Overview of Global Plastics

Global plastics market is estimated at 580 bn USD in 2020 and is projected to grow at a CAGR of 3.4% to 750 bn
USD by 2028. India accounts for less than 6% of global demand. China is the leading producer of plastics,
accounting for roughly 31 percent of global production. In FY19, highest demand for plastics was polyethylene
(33%), polypropylene (32%).

Although there are thousands of different plastics, there are approximately seven broader types of plastic that are
produced and consumed in large quantities: polyethylene terephthalate (PET), high-density polyethylene (HDPE),
polyvinyl chloride (PVC), low-density polyethylene (LDPE), polypropylene (PP), polystyrene/styrofoam (PS), and
miscellaneous plastics. Polyethylene (PE) is the most widely produced plastic worldwide and is used to produce
many products, such as packaging. The second-most produced plastic is polypropylene (PP).

https://www.statista.com/topics/5266/plastics-industry/#dossierKeyfigures
https://www.grandviewresearch.com/industry-analysis/plastic-resins-market

Global demand – supply Polystyrene

Asia Pacific (especially China) is a key producer and consumer of polystyrene accounting for over 50% of total
capacity and demand for PS. While developed markets have rationalised PS capacities through consolidation and
closures by nearly 40%, China has been steadily expanding their PS capacities such that it accounts for more than
25% of global capacity in 2020 and over 90% of PS imports within Asia.

Key players globally are; SABIC, Total, LG Chem, BASF SE, Ineos Styrolution Group GmbH

Polystyrene market globally in 2020, is equally divided amongst GPPS, HIPS and EPS

HIPS will dominate the market as is more high impact resistant. Packaging is the largest segment for HIPS – food
packaging, industrial packaging and consumer packaging. Also used in electronic and appliances applications, such
as in computer housings, TV housings, and freezer and refrigerator liners appliances housing.

EU and US have banned polystyrene in some applications; eg US has banned PS in being used for packaging such
as boxes, containers, and carry bags.

Covid Impact – Supply disruptions from US, Europe, Singapore and Saudi Arabia plant closures of
4,00,000 tonnes, partly driven by styrene shortages, hurricane Ida damages (August 2021, US) while OEM
demand remained robust. This drove up PS prices and profitability: In 2020, there were supply disruptions
(predominantly in styrene plants) in US and Europe which in turn impacted the RM supply while demand from
OEMs were very strong. This pushed margins of PS players upwards. Further, two plants globally stopped PS
manufacturing (Denka -Singapore and Saudi Polymers - Saudi Arabia) and certain N. E. Asian producers have
converted their GPPS capacity to HIPS.

Oct 2021: Supply yet fluctuating in US post hurricane Ida damages in August 2021: USA has been witnessing a
subdued supply of styrene and benzene feedstocks owing to the heavy damages incurred by hurricane Ida at the
Louisiana petrochemical base in late August that led to the shutdown of several production facilities in the region 

Mar 2022: Domestic Polystyrene prices surged with strong product futures and geopolitical tension between
Russia and Ukraine which accelerated the prices of crude and Natural Gas. Prices of Polystyrene will gradually
slow down with sufficient product availability and bearish feedstock Benzene and Ethylene market. 

US and Europe supply issues are expected to be resolved in 2022

https://www.chemanalyst.com/NewsAndDeals/NewsDetails/the-usa-epsilyte-implements-a-second-consecutive-
price-hike-for-expanded-polystyrene-8804

https://www.youtube.com/watch?v=G30o91Kj4Iw
II) What is Polystyrene? By Product/End-Use Sector and Application
Polystyrene (PS) is one of the most widely used kinds of plastic. It is  a polymer made from the monomer
styrene (derived from benzene and ethylene), a hydrocarbon compound. It is a thermoplastic polymer ie
melts if heated and becomes solid again when cooled, known for its versatility in high heat resistance, solid
chemical strength, and notable rigidity that can be molded into objects or made into a foam and used as thermal
insulation. More than one-third of PS is used as a packaging material, so the heat resistance characteristic of PS
is essential for hot-filled methods of food packaging.

A) By Product Type: Expandable Polystyrene (EPS), General-Purpose Polystyrene (GPPS), High-Impact

Polystyrene (HIPS), Extruded Polystyrene (XPS). GPPS and HIPS are the most commonly used PS resins for
injection molding. GPPS is clear and brittle (e.g., compact disc cases, food packaging, disposable utensils,
cutleries, and various other consumer durables ), while HIPS is opaque and more durable (consumer
electronics and toys).

What is Expandable Polystyrene

Expanded polystyrene (EPS) is a rigid cellular plastic originally invented in Germany by BASF in 1950. EPS is
98% air and the rest is made from tiny, spherical EPS beads—themselves made only of carbon and hydrogen.
EPS is among the largest commodity polymers produced in the world and is the second-largest styrene
derivative, after polystyrene. It is a solid foam with a unique combination of characteristics, such as lightness,
insulation properties, durability, and excellent processability. EPS is used in many applications, such as thermal
insulation board in buildings, packaging (including food), cold storage segment for vaccine handling, fish boxes
etc.

B) By End-Use Industry
Packaging Industry, Appliances and Consumer Electronics (EPS), Cold Chain Development (EPS), Construction
Industry (EPS and XPS are effective thermal insulators in buildings), Toys, Gardening accessories, and Medical
Equipment.

Consumer Electronics
After crude, electronics is the second largest item imported in India. Govt’ Make in India initiative for this sector
has resulted in Production-Linked Incentives (https://www.meity.gov.in/esdm/pli). This will create growth
opportunities in the sector - Indian ACE market is expected to double to Rs 1.48 lakh crore ($21.18 billion) by
2025 (from Rs 76,400 crore or $10.93 billion in 2019). China unequivocally dominates the Indian ACE sector, with
yearly imports of 40-50% entirely built units and 70% components.

Building Insulation: Globally EPS and XPS are the material of choice for insulating both commercial and
residential buildings for energy conservation to reduce Co2 emissions.

International Energy Alliance (IEA) in their India Energy Outlook 2021 has predicted that more than half the
increase in demand for energy in India will come from cooling load of dwellings in the period from 2019 to 2040
and have urged Government of India to give greater emphasis on building insulation to combat the same. The
Company is well poised to participate in this segment as and when mandates are created by various state
governments for building insulation.

The EXTRUSION process is required to create continuous linear, two-dimensional shapes. INJECTION

MOLDING produces three-dimensional shapes that do not remain constant in a parallel line.
https://www.youtube.com/watch?v=qn16JtE_vLc
Injection moulding: https://www.youtube.com/watch?v=b1U9W4iNDiQ

Expanded PS manufacturing process video: https://www.youtube.com/watch?v=XXMque-pLhA

C) By Application: HVAC Insulation, Rigid Packaging, Seating, Flexible Packaging

https://ihsmarkit.com/products/polystyrene-chemical-economics-handbook.html

III) Indian Scenario for Polystyrene: From surplus to shortage

Capacity: PS capacity (name plate capacity on standard grades) in India is 472,000 tonnes (pre LG Polymer
incident). Effective capacity is lower at 75-80% given that non-standard grades are manufactured. Three key
players, of which LG Polymers is no longer operational. Hence, operational capacity currently is 3,62,000 tonnes;
effective capacity is 75-80% or 2,71,500 tonnes.

LG Polymer: The company is owned by LG Chem Ltd. of South Korea, an affiliate of LG Corp. - the
electronics-to-services giant. LG Polymers India, earlier known as Hindustan Polymers, was established in 1961
and manufactured polystyrene and its co-polymers
Some of the international players operating in India- BASF, SABIC, Dow Inc.; NOVA Chemicals Corporation;
Styrochem; Formosa Chemical & Fibre Corp, and Kumho Petrochemical etc.

Demand and Imports: Domestic demand in FY20 was 2,55,000 tonnes. Hence, demand-supply is balanced
post the closure of LG Polymers. Imports are indicatively 30-40,000 tonnes to take care of peak demand
requirements (25,000 tonnes per month). Imports increased in FY21 to 40,000 tonnes after the LG Polymers
incident. Imports are from Far East/South East Asia (Malaysia, Singapore, Chinese Taipei), Iran, UAE and USA.
Current import duty on PS import is 29.8%

Exports: Supreme Petrochem used to export 50,000 to 60,000 tonnes annually; however, this has reduced
significantly in FY21, post the LG incident

Margins: This is determined by the delta between global PS and Styrene prices. Historically pre covid (average
of last 5 years), delta for GPPS was USD 180-200/tonne and for HIPS was an additional USD 80-120/tonne.
Currently, price delta for GPPS is USD 300/tonne, with incremental spread for HIPS at USD 250/tonne

Note: Ineos Styrolution capacity is now 90,000 MT

Source: https://www.statista.com/statistics/1167506/india-styrenics-production-capacity-by-company/

1.0 Supreme Petrochemicals: Business Overview

Market Cap: Rs 8500 Cr

ABOUT 
Founded in 1995, Supreme Petrochem Ltd (SPL) is a petrochemical company engaged in the business of
manufacturing polystyrene (PS), compounds of styrenics and other polymers.
SPL is the India’s largest producer and exporter of polystyrene polymer (PS). In India, in PS, it has share of
more than 50% and the largest exporter, exporting to over 100 countries globally. It is the only domestic
manufacturer of extruded PS foam board and styrene methyl methacrylate. 

Geographical Split
Domestic - 93% in FY21 vs 84% in FY18
Export - 7% in FY21 vs 16% in FY18

Parent organization: Supreme Industries (M cap of Rs 25,000 cr)

SPL is promoted jointly by Supreme Industries Ltd., the country's largest plastic product company, and R. Raheja
Group. 

SUPREME INDUSTRIES (Supreme):

Supreme is the largest plastics processing company in India engaged in the manufacture of pipes and fittings and
moulded products (Composite cylinders, furniture, crates, components for automobile and consumer durable
industry), extruded products (mono, multilayer and cross laminated films, PE Foam, PP mats, etc.).
RAJAN RAHEJA GROUP:
Rajan Raheja Group has interests in automobile batteries, cement, ceramic tiles, readymix concrete, software,
petrochem, publishing, cable television, retailing, hotels, asset management and real estate.

Subsidiaries: SPL Industrial Park Ltd, SPL Industrial Support Services Ltd

Number of employees: 350–400
SPL owns and operates state-of-the art production facilities from two locations in India, the first at Amdoshi –
Wangani Village near Nagothane in District Raigad Maharashtra and the second in New Manali Town near
Chennai in Tamil Nadu.

The Styrenics facility at Amdoshi – Wangani Manufactures

 Polystyrene (PS)
 Expandable Polystyrene (EPS)
 Specialty Polymers and Compounds (SPC)
 Extruded Polystyrene Foam Boards (XPS)
 Styrene Methyl Methacrylate (SMMA)
The infrastructure at the facility can handle upto a million tons of Polymers.

The New Manali Town facility manufactures Expandable Polystyrene (EPS)

It has an installed capacity of Polystyrene - 2,10,000 MT (includes 42000 MT of SMMA); expandable

polystyrene - 72,100 MT; polymers and compounds - 30,000 MT; extruded PS - 72,000 M3PA

Value added/Special grade PS currently accounts for 1/3rd of SPL’s total revenues. Focus is on increasing the
share of Value added PS – towards EPS, compounds and ABS: This is because a) margins of EPS are higher
than PS and b) Compounds business supplies to the fast growing electrical, electronic and appliance businesses c)
ABS - engineering plastic, finds many applications and also enjoys better margins.

Revenue breakup: PS and EPS accounts for 68% of total revenues, 24% is styrene imports/trading on behalf of
large consumers including paint companies, and remaining 8-10% is masterbatch compounds and Extruded
Polystyrene.

Raw materials: Styrene, key RM, mainly imported from Gulf, Singapore and U.S.
Styrene Monomer (SM) prices were largely stable during the H1FY21. China’s new SM capacity additions helped in moderating the
price range in Asia. Two large world scale SM plants were commissioned in China in early 2020. A third SM plant with
6,30,000 MT capacity has been commissioned early this year in China. Self-sufficiency for SM in China also will mean more
stable pricing regime due to removal of volatility associated with China’s SM imports.

2.0 Sector/Subsector
Petrochemicals.

3.0 Megatrend/Trend Driver

Production Shutdown of Competitor- During FY21, LG Polymers India Ltd's, second largest polystyrene (PS)
manufacturer in India had to shut down its facility post a styrene vapour leakage incident at its Vizag plant. This
resulted in more than 30% volume growth for SPL on account of the diversion of the incremental volumes catered by
LG Polymers (affiliate company of S. Korea’s L G Corp.) The other competitor is Ineos Styrolution. Players like Dow
Chemicals, BASF etc also sell PS in the country

India: Polystyrene market size is 0.34 million tonnes (MT) in FY21 and forecast to reach 0.52 MT by FY30,
growing at 4.73% CAGR.

Global: Polystyrene market size is USD 30 bn in 2020 and projected to grow by 4% (mordorintelligence.com).
Expanded Polystyrene market is estimated at USD 9.12 bn in 2020 and is expected to reach USD 13.10 bn by
2028 (4.6% CAGR - Verified Market Research).

Consumer Electronics – a driver: In the short to medium term, consumer electronics can be a major driver of
PS. Indian electronics market is expected to reach USD 400 billion by 2025, with India expected to become the
fifth-largest globally.
4.0 Action-Price Action/Buying Activity
From 3rd March’22 it shows PV action. From Rs 730 level it went upto Rs 1000. From April 2020, till date, the stock
has risen nearly 8-9x as covid correction coincided with the structural change witnessed in the sector with closure of
LG Polymers

5.0 Competitive Advantage

 Sole significant domestic player with closure of LG Polymers, post gas leakage incident in May 2020. LG
Polymers yet to resume operations and Ineos Styrolution is small.
 Technology from Shin Ho Petrochemical of Korea (now SH Energy and Chemical Co. Ltd.) for General
purpose and Flame Retardant EPS (at Amdoshi and New Manali plants)
 Technology from NOVA USA (erstwhile Huntsman Chemical Corporation, USA) for Food Grade EPS (at
Amdoshi)

6.0 Improvement in Company/Product/Management/Capex

Capex
FY21: SPL incurred capex of Rs 26 crores related to PS (Polystyrene) and EPS (Expanded Polystyrene) at Amdoshi
and Manali plants.
FY22 end and mid FY23: Expanding PS/EPS capacity by 1,20,000 tonnes (90,000 tonnes for PS and 30,000
tonnes for EPS) @ Rs 250 cr. Capex partly to be completed by March 2022 and rest by FY23.
FY24/FY25: SPL is setting up a new Mass ABS plant (Acrylonitrile-Butadiene-Styrene Terpolymer - higher
grade of engineering resin, a thermoplastic product formed by combining three monomers: acrylonitrile,
butadiene, and styrene) with a total investment of Rs 660 cr. ABS is widely used in automotive, medical devices,
consumer electronics, due to superior performance attributes.

ABS market size in India is ~ 2,70,000 tonnes of which nearly 1,00,000 tonnes or upto 50% is imported. Some
of the major players operating in the India ABS market are Bhansali Engineering Polymers, INEOS Styrolution,
LG Chemical, Saudi Basic Industries Corporation (SABIC), Lotte Chemical Corporation, Toray Industries
Incorporation, Chi Mei Corporation, Samsung SDI Chemical, Formosa Plastic Group, China National Petroleum
Corporation, The Dow Chemical Company, JSR Corporation

Growth drivers are appliance segment, Automobiles as well as Electrical & Electronic segments.

7.0 Execution of Earning Trigger/ROCE

Supreme Petrochem, earnings and cash flows sharply increased by nearly 4.5x in FY21. This is due to
a) closure of a competitor (gas leak in LG Polymers in May 2020) – styrene plant will be relocated to S. Korea,
but polystyrene unit will need to be relocated in India, in a non-residential locality
b) ban on import of air conditioners with refrigerant
c) improved demand from appliance manufacturers
Volumes: In FY22, PS/ EPS volumes are expected to grow by around 16-18%. (In FY21, PS volumes grew by 15-
18% while EPS volumes grew by 20%). Post SPL’ capex completion of PS/EPS in Q4FY22 and Q1FY23, capacity
will increase by 40 to 50%, similar to the capacity unoperational under LG Polymers. Future profitability will increase
due to higher volumes, but margins will depend on the global price delta

OPMs (dependent on delta between FG prices and RM prices): OPMs have also sharply improved to over 20% in
FY21 from 5% levels in FY20. OPMs have slightly moderated to 17% in Q3FY22. Future margins will depend on the
margin spread between PS and Styrene prices. This will be a function of global demand-supply, especially China,
which is expanding both their styrene and polystyrene facilities

March2018 Mar2019 Mar2020 Mar2021 TTM

Sales 3027Cr 3194Cr 2724Cr 3185Cr 4804Cr
OPM 196Cr 93Cr 148Cr 674Cr 914Cr
NP 116Cr 49Cr 103Cr 477Cr 670Cr
Cyclical product, traded globally, with prices determined by international price trends.

ROCE: Healthy ROCE of over 18% historically, which sharply increased to over 70% in FY21

8.0 Capital Allocation Decision

a) Capex: PS/EPS capacity will be expanded by 1,20,000 MT by mid 2022 @ Rs 260 cr and another capex of Rs
660 cr is earmarked towards mass ABS. Company aims a cash payback within 3 years when undertaking new
projects
b) Buybacks in Sep 2020: Utilised Rs 49 cr to buyback 2.5% of share capital. Has completed 3 buybacks so far,
which has not been successful, hence considered reduction in share capital.
c) Dividends: Dividend yield of 1.5%; dividend payout of 30-50%
d) Reduction in share capital: Equity share capital will be reduced to Rs 37.6 cr from Rs 94 cr by reducing the face
value of the share from Rs 10 to Rs 4 and the shareholders will receive the money.

9.0 Tree Analogy

10.0 Cyclicity of Business

Continues to be cyclical.

11.0 Promoter Holding

Promoter holding increase from 62.31% in March 2020 to 63.96% in Sep 2020

12.0 Upcoming Results/Concall Details

Not found in Screener

13. Zero Pledge

No pledge.

14.0 % Float
Public float is 32%

15.0 Anti Thesis/Key Risk

 Raw material price fluctuations – inherently volatile as they are crude oil dependent
 Prices of Polystyrene are highly susceptible to prices of its key feedstock Styrene monomer, which is wholly
imported in the country. Hence, prices for Polystyrene vary strongly with fluctuations in international raw
material prices which ultimately trace benzene and crude oil.
 Polystyrene prices are dependent on international demand-supply which in turn is dependent on China’s role
as a consumer and producer. China is in the process of setting up several styrene and PS plants, which can
result in oversupply and dampen international PS prices
 Government Policy: Reduction in import duty on polystyrene imports (currently 29.8%)
 Environmental Risk i.e any type of leakage which may lead to plant shutdown.
 Environmental Risk The government has banned the manufacture, sale and use of identified single-use
plastic items like plates, cups, straws, trays, and polystyrene from Jul 1, 2022. A ban on single-use cutleries
 in several states such as Sikkim, Maharashtra, Kolkata, etc. is likely to hamper the demand for General-
Purpose Polystyrene in the years to come. Single-use plastic products (SUPs) are used once, or for a
short period of time, before being thrown away. This has drastic impact on the environment as these
plastics are less likely to be recycled
 Export market can be curtailed. Currently, there is a progressive ban on single use plastics (including
products using polystyrene) across North America and Europe.

https://www.theguardian.com/environment/2021/nov/11/scotland-to-ban-plastic-straws-and-polystyrene-food-
boxes-from-june

https://www.indiatoday.in/india/story/govt-bans-manufacture-sale-and-use-of-identified-single-use-plastic-items-
from-jul-1-2022-1840562-2021-08-13

*******************************************

ANNEXURE: IGNORE

GLOBAL DEMAND-SUPPLY
(https://www.chemanalyst.com/industry-report/india-polystyrene-market-68#:~:text=%5BOnline%20Quarterly
%20Update%5D%20India%20Polystyrene,CAGR%20of%204.73%25%20until%20FY2030
Source: IHSMarkit.com

XPS is a better insulator than EPS; https://www.youtube.com/watch?v=aiH4zXEE60g

https://www.differencebetween.com/difference-between-expanded-and-extruded-polystyrene/

https://www.pwc.in/assets/pdfs/publications/2018/future-of-consumer-durables-and-electronics-in-
india.pdf

GLOBAL DEMAND – SUPPLY – POLYSTRENE

Source: IHSMarkit.com

Polystyrene market trends, developments and prospects:

 Polystyrene (PS) capacity rationalization takes place in developed markets (plant closures,
consolidations of market players resulting from higher raw material cost); at the same time, new plants
are added in China and Middle East/Africa
 Mature North America, Europe and Japan PS markets show flat growth while other regions industries
demonstrate positive trends
 Polystyrene faces replacement by other - both natural and synthetic – alternative materials
(polypropylene, polyethylene terephthalate) due to high price and environmental issues
 Higher CAGRs in Africa, the Middle East, Eastern Europe and Latin America compensate moderate
increase in mature PS markets (or even possible decreases)
 Demand grows as a result from increases in downstream industries (electronics and appliances,
construction, disposables, packaging industry)
 PS capacity introductions are expected in Asia Pacific and Middle East; larger production volumes
may lead to extra supply and lower prices

Source: https://mcgroup.co.uk/researches/polystyrene-ps

Global Oversupply in the past: China Factor

The global PS market has undeniably suffered from an oversupply of capacity and weakening demand growth
over the last decade. To survive, PS producers responded by consolidating their capacity in many regions over
the last few years through many mergers and acquisitions. Further rationalization is likely in the more mature
markets, since domestic demand is generally weaker and their exports are limited by a lack of competitiveness.

Almost 40% of capacity has been removed over the years to improve operating rates and, consequently, support
margin positions. In contrast, developing markets for polystyrene, such as the Middle East, Africa, and mainland
China, are focusing on increasing market share; mainland China has been steadily expanding its PS capacity
and now accounts for more than 25% of the global total in 2020.

Northeast Asia is the largest and most influential player in the global polystyrene market. In 2020, the region
accounted for 45–50% of global polystyrene capacity and consumption. Mainland China dominates the
polystyrene market in Northeast Asia, contributing over three-quarters of regional demand and nearly
90% of regional imports. Most Northeast Asian producers operate swing plants that provide the flexibility to
switch between GPPS and HIPS production, allowing the producer to select the product with better demand or
returns. However, standalone GPPS or HIPS plants have better cost efficiency owing to the production of fewer
grades and, in turn, less downtime.
Source: https://ihsmarkit.com/products/polystyrene-chemical-economics-handbook.html
China adding styrene and polystyrene capacities
In 2021-2022, China plans to add a new production capacity for styrene and polystyrenes. In 2020, imports of
polystyrene in primary forms into China expanded to 1.4M tonnes, increasing by +3.8%. This could turn China
from the world's largest importer of those products into an exporter.

Completion may be delayed due to electricity disruptions caused by increasing energy prices and regulations to
reduce CO2 emissions. Despite the ban on single-use packaging, consumption of polystyrene in China will
steadfastly grow, driven by a high demand for plastics in the construction, automotive and other industries.
China is the largest consumer and importer of polystyrene in the world. In 2020, the country imported 1,36M
tonnes of primary polystyrene (nearly 20% of overall global imports) worth $1,43B.

According to industry publications, in 2021-2022 new factories for polystyrene and ABS plastics are expected to
launch with a combined capacity of over 3.5M tonnes, including new facilities for the companies Sinopec Gulei,
Zhejiang Petrochemical и Shandong Lihuaya. If these projects are completed, China may turn from a styrene
importer into an exporter as the new capacity would surpass 2.8M tonnes or the current level imports 
The energy crisis in China could delay the completion of these projects. Beijing’s environmental protection
policies have led the provinces to limit energy consumption to stay within yearly quotas. They are also diminishing
manufacturing operations, including at chemical factories that use coal for power generation. To decrease
greenhouse gas emissions, China must limit coal usage, but this will cause costs to increase for energy-
intensive production methods.
Despite the ban on single-use polystyrene tableware and packaging in China, demand for this polymer will
consistently rise. The majority of the product is used for producing Styrene-butadiene, ABS and other forms of
plastics for the construction, electronics and automobile industries. Rapid developments in these sectors will drive
demand for polystyrene.

China’s Imports of Polystyrene in Primary Forms

In 2020, imports of polystyrene in primary forms into China expanded to 1.4M tonnes, increasing by +3.8% on the
previous year’s figure. In value terms, polystyrene imports dropped from $1.6B in 2019 to $1.4B (IndexBox
estimates) in 2020.
Taiwan (Chinese) (311K tonnes), Malaysia (204K tonnes) and Hong Kong SAR (177K tonnes) were the leading
suppliers of polystyrene imports to China, together accounting for 51% of total imports. South Korea, Singapore,
Japan, Iran and Thailand lagged somewhat behind, together accounting for a further 36%.
In 2020, the most notable rate of growth in terms of purchases amongst the leading suppliers was attained by
Iran (+71.3% per year), while imports for the other leaders experienced more modest paces of growth.
In value terms, the largest polystyrene suppliers to China were Taiwan (Chinese) ($369M), Hong Kong SAR
($209M) and Malaysia ($175M), together accounting for 52% of total imports. These countries were followed by
South Korea, Japan, Singapore, Thailand and Iran, which together accounted for a further 35%.
The average polystyrene import price stood at $1,055 per tonne in 2020, waning by -13.1% against the previous
year. Average prices varied somewhat amongst the major supplying countries. In 2020, the highest prices were
recorded for prices from Taiwan ($1,186 per tonne) and Japan ($1,180 per tonne), while the price for Malaysia
($856 per tonne) and Iran ($863 per tonne) were amongst the lowest. In 2020, the most notable rate of growth in
terms of prices was attained by Hong Kong SAR, while the prices for the other significant suppliers experienced a
decline.
https://www.globaltrademag.com/chinas-polystyrene-production-expansion-to-be-delayed-amid-energy-
crisis/#:~:text=In%202021%2D2022%2C%20China%20plans,those%20products%20into%20an
%20exporter.

Global EPS market

In the last few years, the EPS market has faced the challenges of a worldwide oversupply, weakened demand,
and continued negative customer perception of EPS products. Although global demand will see a slight increase
during the next five years, the overall capacity burden does not seem to be going away during the forecast period.
As of 2020, there is an excess EPS capacity of over 5.5 million metric tons, with the majority held in mainland
China, accounting for 66% of the global surplus. Due to Northeast Asia’s capacity abundance, the region’s
operating rate currently sits near 52%. Although there is much needed room for significant consolidation and
rationalization, there are no official capacity expansions or reductions anticipated worldwide over the next five
years.
Building and construction is the largest demand segment, accounting for over 52% of global EPS demand in
2020. However, this application no longer leads the EPS industry from a growth perspective due to stagnant
demand in Northeast Asia and Western Europe, coupled with an offset in stronger packaging growth. Mainland
China’s construction industry downturn, along with declining insulation demand, have been significant factors
leading to the overall weakening of global EPS demand into the building and construction markets. Another
possible threat that may affect the future outlook is that the use of glass in mainland China’s construction industry
appears to be rising due to attempts at going “green” in building and construction, which entails a reduction in the
use of electricity. Since the use of glass would allow more sunlight into buildings, concrete (EPS insulation) could
potentially face future substitution. North America has shown some of the strongest growth in these markets;
however, the region only accounts for approximately 9% of overall global demand. EPS is commonly used for
building and construction in molded sheets for building insulation, which are often packaged as rigid panels in
both residential and commercial construction. In recent years, geofoam projects have also contributed to global
EPS demand growth. Geofoam is used to provide a lightweight void fill below a highway, bridge approach,
embankment, or parking lot. Over the next five years, global EPS demand for building and construction is
projected to increase at an average rate of 2.6% per year to reach over 3.5 million metric tons by 2025.

https://ihsmarkit.com/products/expandable-polystyrene-chemical-economics-handbook.html

https://www.mordorintelligence.com/industry-reports/polystyrene-market

NOTE:
ABS: Acrylonitrile-Butadiene-Styrene Terpolymer. ABS resins have a well-balanced set of properties for
molding tight dimensional control articles with outstanding surface finishing, good impact resistance,
and metal plating characteristics. ABS resins belong to a versatile family of thermoplastic polymers. ABS
is produced by combining three monomers: acrylonitrile, butadiene, and styrene.
Mass ABS: ABS made with a process called mass polymerization results in what’s sometimes considered a
higher grade of engineering resin. That difference can result in substantial advantages in injection molded,
extruded or thermoformed component properties in addition to oftentimes a lower cost to manufacture those
parts. The enhanced properties offered by this material include:
 Excellent color stability
 Whiter base color
 Purer with less residual monomers, gels and VOCs
 Excellent lot-to-lot consistency
 Wider processing window
Because of these enhanced properties, mass polymerization ABS is widely used in automotive, medical
devices, consumer electronics, and high-end extrusion and thermoforming applications, such as with housings
and enclosures that require advanced performance and aesthetics.
Batch ABS:- Traditionally, ABS has been made with a multi-step emulsion batch reaction process. The result
is that there can be significant variability in the material from batch to batch. Perhaps more consequential, the
emulsion process requires the use of several processing additives such as emulsifiers and salts. Impurities
from the additives typically remain in the finished material in detectable levels, which contributes to the resin’s
yellowish tint.
MTA Million Metric Tons Annually
TPA Tonnes per annum

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