Russian Federation

Demand for polystyrene will grow by 2% worldwide and by 10% in Russia

According to a British market-research consulting agency Merchant Research & Consulting

Ltd., the outlook for polystyrene market seems bright despite modest slowdown.

North-East Asia accounts for over one-third of polystyrene market. China, with above-

average growth rates, covers more than 60% of the demand on this market. However,

demand for polystyrene drops in Western Europe, North America, Japan and some Asian

countries, which may adversely affect the Chinese polystyrene market.

Global annual demand for polystyrene is forecast to inch up 3,5% by 2013.

In 2007, the volume of the Russian market for polystyrene and its copolymers grew a year-

on-year 25 per cent. Current average polystyrene market growth rate is 10% a year. The

highest demand on the Russian market is demonstrated by the following polystyrene types:

general-purpose and shock-resistant (56,2%) and expandable polystyrene (32,7%).

The major polystyrene-consuming sectors in Russia include construction (42%), tare and

package (24.5%) and machine-building (19.2%). Analysts predict bright prospects for the

Russian polystyrene market subject to realization of production expansion plans envisaged

by manufacturers and processing enterprises.

The market research report entitled ""Polystyrene and Styrene Copolymers (ABS, SAN and

others) Market Research"" also features the following information:

Analysis of the global polystyrene market;

Polystyrene market in Europe, China and CIS;

Main polystyrene manufacturers worldwide and in the CIS countries;

Main polystyrene consumers worldwide and in the CIS countries;

Other subjects.

Building insulation provides an effective way to save a good deal of money and also protect the environment. 23 million homes are in need of insulation improvement in Germany alone: if their heat insulation was updated to the newest standards, heating oil consumption could be cut by 83 billion liters, and CO2 output would fall by 250 million tons per year. The savings potential is even greater in countries with warmer climates, since air conditioning systems require a considerable amount of energy. This provides a good outlook for manufacturers of EPS, the most important insulation material. Ceresana, the market research institute, is releasing a new study covering expandable polystyrene.

Building with EPS

Roughly two-thirds of EPS demand is accounted for by blocks and panels in the construction industry, the largest application area. The construction industry's importance will continue to grow: many governments, particularly in Europe, are promoting measures to increase energy efficiency. Therefore Ceresana Research expects to see continued growth in EPS consumption starting in 2010, despite declining building sectors in many locations. After worldwide EPS revenue had increased at an average rate of 7.3% per year between 2000 and 2008, it fell to approximately EUR4.3 billion in 2009.

"Due to substantial price decreases, revenue fell by up to a third in some world regions," said Oliver Kutsch, owner of Ceresana Research. "However, prices are already starting to rise again. We expect market value will reach the level from 2008 again in 2012."

Universal Foam

Aside from heat insulation, used for example in boilers and entire tanker ships, EPS is primarily applied where shock absorbance and sound insulation is required. The small foam pellets can be found in products, such as protective helmets for cyclists, electronics packaging and sound baffles. Since the material is harmless, it is also used for disposable cups and other food containers. EPS is very buoyant because it consists of up to 98 percent air, and is used for lightweight cores in surfboards, life jackets, and life-savers. Simple and almost arbitrarily moldable EPS is utilized in the production of architectural models, as well as theater backdrops and decorations. Lesser known technical applications of EPS include for example, void formers for iron or aluminum parts in motors.

Upsurge in the East

EPS production is particularly dynamic in Eastern Europe and the Asian Pacific. Ceresana Research expects to see growth there until 2016, in the amount of 7.1 and 5.9 percent per year, respectively. China alone, which is already the world's largest EPS manufacturer, should see capacities increase by more than 750,000 tons, while East European countries should see a growth of just less than 350,000 tons. In contrast, EPS production in Japan and South Korea will most likely fall.

"Market Study -- Expandable Polystyrene" presents information regarding the various EPS grades, their advantages, application possibilities, as well as legal situations and certifications, innovations and trends and recycling. The market report contains 63 profiles of current and future manufacturers, with information on product ranges, capacities, ownership structure and corporate integration. Individual EPS markets are analyzed in detail for 64 countries, with information on prices, imports and exports -- including prognoses until 2016.

Ceresana Research is one of the world's leading industrial market research institutions. Companies, institutions, and organizations from more than 40 countries already benefit from our global market data and well-founded prognoses. Its core competencies include: chemicals, plastics, additives, commodities, materials, industrial components, packaging, and construction materials.

Global Growth RateExpandable polystyrene (EPS) is a rigid cellular form of polystyrene with good thermal insulation and shock absorbing properties, high compressive strength, very low weight and resistance to moisture. These properties of EPS bring many benefits, in particular to the construction and packaging industries.

Building and construction applications are the largest outlet for EPS accounting for around two-thirds of demand. Large quantities are used to make insulation foam for closed cavity walls, roofs and floor insulation. EPS foam also finds uses in road construction, bridges, drainage, flotation and sound insulation.

The other main application of EPS is in packaging. Food items such as eggs, meat, fish and poultry can be packed with EPS which is also used to make vending cups and containers for carry-out meals. The good shock absorbency of EPS makes is suitable for the packaging of delicate electronic goods.

Other uses for EPS include providing protection in crash helmets and as decoration in design work.

The EPS market has seen strong growth globally, driven by the construction sector where it is one of the top choices for insulation. According to US-based consultants CMAI, global demand grew at an average of 5.5%/year in the 2000-2006 period.

In western Europe, the new building insulation requirements are boosting demand, offsetting the decline in packaging applications. The European Union plans to extend the Energy Performance in Buildings Directive (EPBD) to include renovated buildings from 2009, including the majority of small buildings. The EU is also expected to specify minimum energy performance in buildings.

The European insulation market for EPS is expected to see more than 20% growth by 2010, according to the manufacturer Nova Innovene. The total EPS market in Europe is estimated to be 1.21m tonnes with construction applications including building insulation accounting for 70% of demand.

The European EPS market is balanced to tight following some plant closures. However, there are a number of projects underway. BASF will expand capacity by 130,000 tonnes/year at Ludwigshafen, Germany, by end of 2008. Sunpor Kunststoff is building a 100,000 tonnes/year EPS plant in St Poelten, Austria, due on stream in 2009. Smaller expansions are planned in Poland, Hungary and Czech Republic.

China is the largest market for EPS accounting for one-third of global demand. The booming Chinese economy has boosted demand for EPS in the packaging of a variety of items such as consumer electronics, personal computers and household items. At the same time, the growing construction and building industry has ensured that demand for block flame retardant EPS, which is used in insulation panels for buildings and bridges, remains buoyant.

However, extensive new EPS capacity has been added in northeast Asia, especially China. As a result, the Chinese market is oversupplied with reports that most facilities operate at around 50-70% of capacity. Hence, northeast Asian producers are targeting the export markets of Europe, the Middle East and Africa.