The World's Largest Styrene and Polyethylene Factories are Planned to Be Sold!

Citing Bloomberg news, TotalEnergies is preparing to sell its styrene and polystyrene production line in Carville, Louisiana, and the buyer may be SABIC. According to media reports, the total value of the transaction may reach $1 billion. Neither party to the transaction confirmed the news.

According to TotalEnergies' annual report, the French energy giant and the Saudi group jointly own the styrene production plant (Cos-Mar Company) in Cavil with an annual capacity of nearly 1.2 million tons/year. Its polystyrene division is owned by TotalEnergies. According to the TotalEnergies website, they are the largest styrene and polystyrene plants in the world.

The production capacity of styrene in the United States has tended to be stable in the past ten years. Its main downstream is PS, and the terminal is mainly the packaging industry. Due to the recovery of exports and limited domestic demand growth in 2023, styrene is facing an oversupply situation. And due to the emphasis on ESG by the government and enterprises, the PS and styrene markets may further shrink.

It is expected that with the increase in U.S. styrene production in 2023, although exports to Europe will improve year-on-year, exports to Asia will partially decrease, and total export volume may be difficult to return to pre-2021 levels. Against the backdrop of limited growth in terminal demand and the focus of several major PS manufacturers on raw material recycling, the U.S.'s declining demand for styrene may lead to an oversupply of styrene. In the future, the United States may need to compress styrene profits and increase exports to Europe, or reduce its styrene operating rate to reach a new balance.