HOUSTON - Dow Chemical Co., which claims to be the world leader in the production of polystyrene, expects demand for PS to grow 4.8 percent per year for the next five years throughout the world. Meanwhile, Dow expects worldwide PS capacity to grow at a rate of 3.6 percent during the same time.
Dow officials believe demand for PS will grow faster than the world's economy, and at very intense rates in the Asia-Pacific region, according to Robert M. Beil, commercial director for PS for Dow Chemical Co.
Beil spoke March 20 at the Dewitt Petrochemical Review in Houston.
Dow of Midland, Mich., claims to have nearly 3.3 billion pounds of production capacity for PS resins throughout the world, with nearly 2.5 billion pounds of capacity in North America and Europe.
``Positive demand drivers are numerous, and Dow believes they will result in a demand growth forecast of 4.8 percent in the 1995-2000 time frame. It should be noted that this is on the heels of virtually flat global demand from 1994-1995, as PS pricing reached historical highs and styrene monomer was sold out,'' Beil said.
Beil noted that PS resins have faced numerous threats from environmental groups. Their efforts led to the abandonment of PS clamshell packaging at the McDonald's restaurant chain and in a number of other applications, Beil said.
To counter those moves, Beil cited Dow's work in developing recycled applications for cups and packaging that include videocassettes and home insulation products.
Such ventures have fulfilled their initial charter in helping turn the tide of public opinion, he said.
However, he later noted indirectly that PS faces another environmental challenge in North America.
Beil said Dow predicts demand for PS will increase by 1.8 percent a year in North America from 1995-2000.
``You can argue that we have understated North American growth, but we still have the impending United States Environ-mental Protection Agency classification of styrene monomer to contend with,'' he said.
The EPA is considering classifying styrene monomer as a toxic chemical.
Even considering that pending classification, Beil said he expects North American demand and supply for PS to follow a ``classic `boom-or-bust' cycle,'' marked by a volatility that could harm users and resin producers alike.
``Industry operating rates [in North America] are projected to drop to the high 70s before recovering post-2000,'' Beil said.
Meanwhile, he said industry operating rates in the Asia-Pacific region will rise to percentages in the low 90s.
``The production shortfall in the Pacific reaches a large enough level by 2000 that additional capacity is warranted and, in all likelihood, will be built,'' Beil said.
Because of those disparities in supply and demand, Beil said the global supply and demand outlook remains positive, and that PS producers have to consider markets for PS resins as global markets.