Europe Chemical Profile: butadiene

22 February 2013 10:18  [Source: ICB]


ButadieneButadiene (BD) is used to produce synthetic rubbers and polymer resins, as well as a few chemical intermediates. The largest derivatives are polybutadiene rubber (BR) - 28%, and styrene butadiene rubber (SBR) - 25%, mostly used in tyres.

Other uses include acrylonitrile-butadiene-styrene (ABS) resins - 12% , styrene-butadiene latex and block copolymers - 12%, and adiponitrile nylon intermediate (ADN) - 4%.


In Europe, actual production has hovered around the 2m tonnes mark since 2008 - production in 2012 was 1.6% down compared with 2011, according to the Association of Petrochemical Producers in Europe (APPE). Demand was estimated at around 1.8m tonnes in 2012.

However, while Europe is net long, on a structural basis global demand outweighs supply, placing Europe in an advantageous position. It exported around 12% of its production in 2011. But in 2012, there were concerns about the ability of key derivatives such as synthetic rubber to pass on costs to end-users, and export demand dwindled because of fears over the global economy.

The combination of soft domestic and export demand in 2012 was mitigated to some extent by planned and unplanned turnarounds, and ethylene demand-led reductions at European crackers. But it was still a record year for European BD exports - industry estimates suggest 260,000-270,000 tonnes were exported in 2012.

Sources are cautious about demand levels in 2013, and many consumers are not expecting any significant improvement in demand for the first quarter, and possibly even into the second. BD extraction units at four sites will undergo maintenance in 2013, and this should help support spot pricing. Additionally a heavy shutdown slate at crackers will also help to restrict BD feedstock, crude C4, so even if domestic consumption is not much improved in the first half of the year, the turnarounds should help offset this.


European monthly contract prices (MCP) were introduced in January 2011 rising significantly and consistently each month on the back of strong demand to peak at a record high of €2,525/tonne FD (free delivered) NWE (northwest Europe) in August 2011 before a sharp correction in the latter part of that year.

Reasonable demand saw the MCP creep back up again in 2012 - peaking at €2,275/tonne in April - but then prices dropped back as consumers, influenced by economic worries, started to cut back on consumption rates.

The European market was fairly stable towards the end of 2012. Domestic demand was slow in line with year-end expectations but export demand for Asia helped keep supply balanced. The February 2013 monthly contract price settled at a rollover €1,365/tonne FD NWE.


Most BD is obtained as a by-product in the steam cracking of naphtha and gas oil to make ethylene and propylene. The feedstock determines the yield: light feedstock yields five times less BD than heavy feedstock.

Other processes include the dehydrogenation of purified n-butene or butanes from steam crackers or C4 refinery streams. A few companies are looking at bio-based routes.


ButadieneGlobal markets are forecast to stay short of BD in the near term, as capacity remains below demand growth. ABS SBR and BR is expected to drive global BD demand at around 3% to 2020.

Asia accounts for over half of global BD demand, while Europe stands at about 23% but consumption in the Middle East and Central Europe is expected to grow most significantly over the next 10 years.

Asia and the US will remain big importers, with Europe as big exporters. Sources expect export volumes to grow in 2013 as the outlook for domestic consumption remains muted.

A raft of expansion/new capacity announcements in 2012 reinforces Europe's position of supplier to the global market.

By: Nel Weddle
+44 20 8652 3214

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