22 July 2009 16:16 [Source: ICIS news]
By Nigel Davis
In a report of reactions to rising butadiene prices, the comment highlighted the fact that even suppliers in
Butadiene spot prices had hit $1,000-1,050/tonne (€700-735/tonne) CFR (cost and freight) northeast (NE)
Steep rises in regional butadiene prices contributed to the much higher ICIS Petrochemical Index in July compared with June. Prices were 67% higher in the
The price increases, however, were hitting the market at a difficult time. Demand growth for butadiene has been entirely focused in Asia Pacific where significant new derivatives capacity has built up, particularly in
Most new crackers in
Butadiene supply globally was extremely tight for the first three quarters of last year as higher naphtha costs drove ethylene makers to switch to cracking gas feedstocks and limiting supply. The market tightness, however, disappeared as demand collapsed in quarter four.
The butadiene story is one of the shift of markets to Asia and to regions like central Europe and away from the
The vehicle tyre replacement market is huge, and most butadiene goes into SBR and butadiene rubber (BR), but vehicle owners are driving less. The lack of demand from the auto makers and weakened demand for replacement tyres from vehicle owners makes a deadly combination.
Butadiene is also used to make the engineering plastic ABS (acrylonitrile butadiene styrene), but that market has been hit globally by weakened automobile demand and lower demand from the electronics industries.
Changes in the end-use markets are driving change upstream in butadiene demand growth patterns.
The North American market has weakened as downstream demand in the auto, tyre replacement and electronics industries has moved to
Demand has risen in central
Rapid growth is forecast for the
The changing shape of the global market is driven not simply by rubber demand but also demand for high impact polystyrene (HIPS) – butadiene is an impact modifier for HIPS – the nylon intermediate HDMA (hexamethylene diamine) and ABS.
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