Polystyrene Market Intelligence

Industry Outlook & Drivers

Global Market Outlook on Polystyrene

• The global market is estimated to grow at 3.4 percent during 2015-2022 driven by steady demand for EPS resin in construction and HIPS/GPPS resin in packaging and electronics sectors
• China will propel the demand for HIPS/GPPS resin due to the growing demand in the electrical and electronic industry.This sector is expected to grow by 8– 10 percent during 2015– 2022

Industry Best Practices

Volume/ Minimum Order Quantity

• Direct buying is preferred for minimum order quantity of one or above truck load /rail load
• Low volumes may limit the benefits of direct buying for a CPG company
• One truck load Volume: 25 MT
• One Rail load Volume: 90-110 MT

Logistics

• Logistics management is one of the major cost component in the direct buying process
• Fuel cost, which is a major spend in transportation, is expected to be three times lower for rail cars over truck load

Process Complexity

• Producers may give preference to large convertors and distributors over CPG buyers
• However, CPG buyers can enter into long term contracts with producers with a minimum guarantee so that a steady business relationship is maintained over time

Global Market Size-Polystyrene

• The global PS market is expected to grow at 3.4 percent during 2017–2022, driven majorly from downstream users, like construction and electronics. The global PS market is expected to reach $40.41 billion by 2022

• The HIPS/GPPS market is driven by healthy demand from the Asian market, which is expected to grow by 4–5 percent CAGR during 2017– 2022

• The EPS market is driven by healthy demand from the Asian market, which is expected to grow by 3 –4 percent CAGR during 2017–2022, while mature markets, like Europe and North America, are expected to grow by 2 –3 percent CAGR during 2017 –2022

Global Capacity-Demand Analysis

• Global production capacity for polystyrene* (HIPS and GPPS) is estimated to be around 14 million metric tons, with Asia accounting for about 54 percent of the total capacity
• Global production capacity for polystyrene* (EPS) is estimated to be around 12 million metric tons, with Asia Pacific accounting for about 70 percent of the total capacity
• The global PS market is expected to grow by 3– 4 percent during 2017–2022, driven majorly from downstream users, like construction and electronic

Market Outlook

Capacity Dynamics 

• Mature markets like Europe, North America and Japan have witnessed capacity rationalisation resulting in a total of 4-6 suppliers per region, while developing nations like Middle East , China and Taiwan have witnessed capacity additions and are expected to grow at a rate of 1-3 percent during 2017-2022

Demand Dynamics 

• The HIPS/GPPS market is driven by healthy demand from the Asian market, which is expected to grow by 4–5 percent CAGR during 2017–2022

• The EPS market is driven by healthy demand from the Asian market, which is expected to grow by 3–4 percent CAGR during 2017–2022, while mature markets, like Europe and North America, are expected to grow by 2–3 percent CAGR during 2017–2022

Engagement Outlook

• For CPG buyers with volume of 5,000–10,000 MT, one can look at direct buying from producers as a viable option
• Direct buying can reduce the overall sourcing spend of PS by 5–8 percent, as the margins between intermediaries, like distributors and convertors, get eliminated