India could be key future supply source for butadiene - LANXESS

03 March 2011 02:42  [Source: ICIS news]

BRUSSELS (ICIS)--India could become the number one source for butadiene (BD) given that most of the new capacity additions in China and the Middle East will be integrated with derivative rubber facilities, a LANXESS executive said late on Wednesday.

At least two BD plants are scheduled to start up in India in 2012. One plant is by Indian Oil with a capacity of 120,000 tonnes/year and the other is by ONGC Petro-additions Ltd (OPaL) with a capacity of 95,000 tonnes/year.

India is currently an exporter of BD. Reliance and Haldia are both BD producers in India and export BD to synthetic rubber producers in northeast and southeast Asia. Reliance operates a 72,000 tonne/year BD unit, while Haldia has a capacity of 100,000 tonnes/year of BD.

“Although China has lots of butadiene projects, most of the facilities have downstream plants such as synthetic rubber,” Dr Christof Krogman, vice president of petrochemical projects from LANXESS, said during a presentation at the 6th ICIS World Olefins Conference in Brussels, Belgium.

China’s PetroChina and Sinopec have seven BD plants and projects with a total capacity of 931,000 tonnes/year, out of which three are scheduled to come on stream in the next two years, he added.

Meanwhile, Asia BD demand continued to outstrip supply, propelling BD spot prices to $2,450-2,500/tonne (€1,789-1,825/tonne) CFR (cost & freight) NE (northeast) Asia during the week ended 25 February, reflecting transactions and price discussions for shipments in the second half of March, according to ICIS.

This had surpassed previous expectations that prices may surge in the first quarter to above $2,300/tonne in March.

After India, the next potential future source of BD supply is the Middle East, where there are 11 projects slated for completion in the next five years.

However, those producers are all considering rubber derivative projects, Dr Krogman said, noting that there were no downstream projects for BD in India.

Additional reporting by Helen Yan

($1 = €0.73)

For more on butadiene, visit ICIS chemical intelligence
Please visit the complete ICIS plants and projects database

By: Helen Lee
+65 6780 4359

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