Demand for ABS Booming
Lotte Chemical will stop producing expanded polystyrene (EPS), a product that logged 87.8 billion won in sales last year, accounting for 0.72 percent of the company’s total sales. It will retool EPS facilities to expand production of high value-added acrylonitrile butadiene styrene (ABS).
EPS is a raw material for traditional Styrofoam. Its demand has recently declined as it has been found to contain toxic elements, including formalin, which causes cancer.
On the other hand, ABS has been booming as demand for home appliances and IT products grew due to the spread of COVID-19. The price of ABS has more than doubled from US$1,100 per ton in early 2020 to US$2,400 recently. An ABS spread also jumped from US$300 to US$800 over the same period.
Currently, Lotte Chemical produces 670,000 tons of ABS a year. This facility conversion will boost the company’s ABS output to 760,000 tons a year by 2023. LG Chem is Korea's No. 1 ABS producer, with an annual output of two million tons.
Meanwhile, Lotte Chemical is actively expanding its expanded polypropylene (EPP) material market, which is growing rapidly due to the rise of environmental, social, and governance (ESG) management and consumers' stronger awareness of eco-friendly products and consumption. The decision was made based on the judgment that EPP can be used not only as a material for eco-friendly buoys but as a recycled cooling material and a lightweight material for electric vehicles.
EPP has been used as a material for eco-friendly buoys since 2018. Demand for EPP has increased sharply due to COVID-19, an increased interest in recycled materials among companies pursuing ESG management, and changes in the consumer awareness of eco-friendly materials. The global market for EPP is expected to grow to 493,000 tons in 2025 from 368,000 tons in 2020.