CMAI: Butadiene to grow 3.4%/year

25 March 1999 19:20  [Source: ICIS news]

HOUSTON (CNI)--Global butadiene demand will grow at an annual rate of 3.4% through 2003, but a faster ethylene growth rate will result in a surplus of crude butadiene, an industry expert predicted here Thursday.

That rate of 3.4%/year for butadiene is stronger than the product saw in the last recession, according to Andrew Pettman of Chemical Market Associates Incorporated (CMAI).

But since global ethylene demand is projected at 4.8%/year, Pettman predicted there will be a crude butadiene surplus of 9% "that will have to be dealt with."

Speaking at CMAI's 14^th annual World Petrochemical Conference, Pettman said that oversupply will be partly solved by investment in extraction capacity, especially in Asia.

But, he noted, that increase in Asian capacity will be more than is required by the Asian butadiene market, and the region's producers will need to move large parts of their supply outside of the region to the US and Mexico.

As a result, said Pettman, European producers will reduce their exports to North America and re-investment margins will not be achieved "except in special situations."

By: Mary Ann Tawasha
+1 713 525 2653

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