Styrenics, the fourth largest commodity plastics group, have reached a stage of stagnancy or very low growth in India. Higher inventory levels with the converting industry, particularly in the beginning of this financial year and slower demand could be the reasons for the lackluster performance of Styrenics in this financial year so far.
The first half of 2002-2003 financial year has not been very good, particularly for GPPS/HIPS. Some slow down has been witnessed in EPS. ABS seems to remain afloat with some growth. Most of the industry experts feel that GPPS/HIPS may not show much growth this year compared to last year. PS also faces stiffer competition erosion in the growth of EPS. On the other hand, ABS is expected to show 8-10% growth in this year. The estimated demand for Styrenics in 2002-2003 is likely to be:

PP has been aggressively developing applications that have been so far considered to be the forte of PS. The easy availability of clear PP injection moulded products has replaced some of the existing applications of GPPS. Higher feedstock cost along with softer prices of PS on account of global excess capacity has indeed taken toll on the profitability of PS raw material producers.

The PS converting industry seems to have mixed performance. Those engaged in niche segment like Moser-Baer, involved in exports of recordable CDs, have been steadily increasing consumption to almost 25 KT of PS in this year.
Similarly the Television cabinet manufacturers are also doing well on account of continued demand of TVs in India that is expected to grow by 20% and reach the level of about 6 million in 2002.
On the other hand, the white good industry that includes refrigerators seems to have weaker demands for the last two years. The overall growth of refrigerators seems to be hovering around 2-3%.
The music audio tape market is slowly yielding to CDs that results in some loss of PS market.
No major new developments of either converters or applications are also responsible for the stagnancy of PS/HIPS markets.

The demand of ABS continues to grow on account of the automotive and PC growth in India. In fact, the industry experts feel quite optimistic to achieve 10% growth this year.

The Indian manufacturing capacity of Styrenics exceeds the present demand.
In fact, the overall capacity of 490 KT/year compared to 250KT demand compels the producers to export the surplus. It is expected that almost 80-90,000 tonnes of PS would be exported in 2002-2003.
On the other hand, the capacity of SAN/ABS seems to be in balance. In fact, almost 5000 tonnes of SAN/ABS would be imported during this year. No wonder both the ABS producers (Bayer ABS and Bhansali Engineering) are considering expansion.

The capacity-demand scenario of PS can be seen in the following table.

The historical growth of Styrenics in India over the last decade is about 9%. An economic upturn could help in achieving similar growth in the future, but the prospect of any healthy growth in this year sems highly improbable.

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