World BD market will tighten by 2011- US consultant

26 March 2009 21:14  [Source: ICIS news]

HOUSTON (ICIS news)--The world butadiene (BD) market will tighten significantly by 2011, as demand recovers and crackers shift towards lighter feedstock, a US consultant said on Thursday.

Demand for BD had collapsed due to the downturn in the automobile industry, said Bill Hyde, director of C4 olefins and elastomers for Chemical Market Associates Inc (CMAI). Hyde was speaking at his company’s 2009 World Petrochemical Conference in Houston.

Hyde attributed the demand drop to consumers, who are delaying purchases of replacement tyres, he said. Replacement tyres make up 70% of the global tyre market, which, in turn, is a major end market for BD.

Consumers, however, can only put off tire purchases for so long, Hyde said. Ultimately, they will have to replace them, and demand will recover as a result.

At the same time, BD supplies should tighten, as crackers in western Europe and North America shift towards lighter feedstock. Lighter feedstock results in less BD.

Demand in northeast Asia should also increase, he said.

Due to shifting feedstock and higher demand, BD prices will recover quicker than those for other petrochemicals, Hyde said. By 2011, prices should spike significantly.

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By: Al Greenwood
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