Polystyrene: A Game of Supply and Demand with Extreme Contrasts

At the beginning of 2025, the third phase of Jiangsu Saibaolong project was officially put into operation, with a cumulative new capacity of 360,000 tons in the first half of the year, thus pushing the total capacity of the PS industry to 7.28 million tons. Under the capacity expansion, the market showed a pattern of oversupply where "the production end releases a large quantity, but the consumption end cannot absorb it".

Despite the increase in capacity, the average operating rate of domestic PS plants in the first half of 2025 was only 59.61%, an increase of just over 2 percentage points compared with last year. Specifically, the supply was briefly loose after the Spring Festival; however, in the second quarter, due to profit contraction and the impact of the traditional off-season, many enterprises had to choose to reduce production, and some even directly stopped production for maintenance, leading to a significant decline in the operating rate.

In the first half of 2025, the cumulative domestic PS output reached 2.363 million tons, a year-on-year increase of 13.8%. The release of new capacity, coupled with some large factories maintaining high-load production, drove the growth of output, but the downstream demand could not keep up, further intensifying the inventory pressure. In January, due to policy stimulus and support from export orders, the inventory was at a low level; however, after March, demand was overdrawn, and coupled with the United States imposing tariffs, exports were blocked, so inventory began to soar; by June, the domestic finished PS inventory reached 100,000 tons, an increase of 20,300 tons compared with the same period in 2024, a year-on-year surge of 25.5%, and the market digestion cycle was forced to lengthen.

To ease inventory pressure, enterprises have tried their best to increase export efforts. In the first half of 2025, the cumulative export volume soared by 56.19% to 150,100 tons. However, the import volume shrank by 15.82%. Even though exports were so strong, they could not offset the weak domestic demand.