Butadiene

23 October 2000 00:00  [Source: ICB]

Butadiene is the primary raw material for synthetic rubbers. Demand is forecast to rise steadily and prices have risen sharply

Supply/demand

North America is the world's largest importer of butadiene and the major destination for European exports. According to CMAI consultancy the US will import 291 000 tonne this year, 75-80% of that from Europe. CMAI said the figure was 239 000 tonne in 1999, 145 000 tonne of that from Europe.

Demand growth from 1999 to 2000 is forecast at 5.3% in Europe and 5.6% globally. Synthetic rubber took 64% of the total demand for butadiene last year and CMAI reports that demand for butadiene in SBR and PBR will grow by over 800 000 tonne in the period 1998-2004. World consumption of butadiene into SBR will grow from just over 2.4m tonne in 2000 to over 2.7m tonne in 2004 while PBR will consume 2.2m tonne of global butadiene this year reaching nearly 2.6m tonne in 2004. Global demand growth rates are expected to average 3.9%/year until 2004.

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Uses

Butadiene is the primary raw material for the manufacture of synthetic rubbers - styrene butadiene (SBR), polybutadiene (PBR), chloroprene and nitrile. SBR is the largest end-user and accounts for 31% of global butadiene demand, followed by PBR at 28%. It is also used to make other elastomers such as styrene-butadiene latex, polymers and plastics such as acrylonitrile-butadiene-styrene (ABS) resins. Butadiene is also a chemical intermediate to produce adiponitrile which is then converted to hexamethylenediamine (HMDA), a key ingredient in the manufacture of nylon 6,6.

Technology

The majority of butadiene is extracted from steam crackers, although it can also be produced by the dehydrogenation of butenes when economics allow.

Butadiene is extracted from the C4 cracker stream by extractive distillation where it is dissolved in an aqueous solution of a solvent and withdrawn from the bottom of a distillation column. In a second column, butadiene is separated from the solvent before final purification. The feedstock used to make ethylene determines the relative yield of butadiene. The heavier the feedstock the higher the butadiene production.

Health and safety

Butadiene is a highly flammable and reactive liquid/gas and is suspected to be a human carcinogen. Exposure to 1,3-butadiene gas can irritate the eyes, nose and throat, while breathing the vapour can cause sleepiness and lightheadedness.

Pricing

European prices have risen consistently from E230/tonne in Q2 1999 to the current Q4 contract level at E590/tonne, an E80/tonne rise on the previous quarter to reflect high demand and limited availability. In the US, producers were successful in implementing a 2 cent/lb rise for October, lifting the contract price to 28 cent/lb.

Outlook

The current tight supply in Europe and the US is forecast to continue through 2001 and beyond, with global operating rates (excluding eastern Europe) averaging over 90%. World demand will outpace the rate of capacity additions, pushing operating rates steadily higher. The fastest demand growth will come from southeast Asia and the subcontinent of India, while northeast Asia will become the largest consuming region of refined butadiene when it passes North America in 2000. New capacity is being added at a rate of 2.5%/year and 410 000 tonne/year of additional production will start up in China, Taiwan and Indonesia by 2004. Net trade will remain relatively constant at about 500 000 tonne during 2000 but a surge in trade to North America in 2001-02 will push net trade over 600 000 tonne.

North America is adding new ethylene capacity during 2000-03 such that idled butadiene extraction capacity must be restarted. A new 408 000 tonne/year extraction unit is planned by Shell/BASF/AtoFina at Port Arthur, Texas, to start up in early 2003, while Huntsman plans to add 90 000 tonne/year to its Port Neches facility.

EUROPEAN AND US BUTADIENE CAPACITY, TONNE/YEAR

Producer	Location	Capacity
Europe
AP Feyzin	Feyzin, France	80 000
Arpechim	Pitesti, Romania	65 000
AtoFina	Gonfreville, France	60 000
BASF	Mannheim, Germany	10 000
Borealis	Sines, Portugal	45 000
	Porvoo, Finland	25 000
BP	Grangemouth, UK	75 000
BSL	Bohlen, Germany	45 000
Olefinverbund
Dow	Terneuzen,	170 000
	Netherlands
DSM	Geleen, Netherlands	120 000
Elenac	Wesseling, Germany	170 000
EniChem	Ravenna, Italy	130 000
	Brindisi, Italy	120 000
Erdolchemie	Cologne, Germany	245 000
ExxonMobil	ND de Gravenchon,	80 000
	France
FSK	Zrenjanin, Yugoslavia	45 000
Huntsman ICI	Wilton, UK	100 000
Kaucuk	Kralupy,	80 000
	Czech Republic
Marghera	Porto Marghera, Italy	65 000
Butadiene
MZRiP	Plock, Poland	40 000
Naphtachimie	Lavera, France	120 000
Neftochim	Burgas, Bulgaria	70 000
OMV	Schwechat, Austria	50 000
Oxeno	Marl, Germany	145 000
Petro Borzesti	Borzesti, Romania	100 000
Repsol	Puertollano, Spain	32 000
	Tarragona, Spain	20 000
Shell	Moerdijk,	115 000
	Netherlands
	Berre, France	80 000
US
BP	Chocolate Bayou,	180 000
	Texas
ExxonMobil	Baton Rouge,	380 000
	Louisiana
	Baytown, Texas	330 000
Huntsman	Port Neches, Texas	925 000
Equistar	Channelview, Texas	855 000
	Chocolate Bayou,	135 000
	Texas
	Corpus Christi,	210 000
	Texas
Shell	Deer Park, Texas	300 000
	Norco, Louisiana	575 000
Texas	Houston, Texas	875 000
Petrochemicals

Source: CMAI/ECN

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