12 November 2012 20:44 [Source: ICIS news]
RIO DE JANEIRO (ICIS)--On-purpose butadiene plants will be necessary in some regions as the shift to ethane cracking in the US tightens the global market, an industry consultant said on Monday.
The trend in the US to crack lighter feedstocks continues, which has been advantageous for some products like polyethylene and glycols, but less advantageous for the butadiene market, IHS chemical analyst Bill Hyde said during a presentation at the Latin American Petrochemical Association (APLA) annual meeting.
Two on-purpose butadiene plants are starting in China, and there could be four by the end of 2013 and eight in the next five years. They will be small plants but important to the market in China as butadiene demand is strong.
In addition, the creation of the small plants will allow the butadiene market to reduce its dependence on Sinopec, the major supplier of butadiene, Hyde said.
In the US, capacity could be added as early as 2017, and the plants will be bigger at around 250,000 tonnes. There could be as many as three of them by 2020, Hyde added.
US butadiene demand last year was 1.9m tonnes compared with the 1.6m tonnes the country produced. Demand is expected to hit 2.4m tonnes by 2020, while production is likely to climb at a slower rate to 1.9m tonnes, according to North America consulting firm GBI Research.
The APLA conference ends on Tuesday.
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