Price and market trends: Europe, Asia butadiene producers chase shrinking export market

23 September 2013 00:00  [Source: ICB]

European and Asian butadiene (BD) producers will be chasing a shrinking export market in the not too distant future because of substantial regional capacity additions in 2013-2016, said Philip Cook of JACOBS Consultancy.

Speaking at the 2nd ICIS Butadiene & Derivatives conference on 11 September, he said around 1.1m tonnes/year of new BD capacity is expected to be onstream in Asia by the end of 2013 – primarily in China, allowing it to become more self-sufficient and turning away from being a key BD importer.

According to another speaker at the conference, Cedric Villiere, of traders Integra, there is already some evidence that Asian buyers are trying to give priority to local sellers, given the benefits of a shorter lead time – two weeks transit time compared with six weeks from Europe – as well as more pricing accuracy and less risk.

European producers, perhaps buoyed by the tremendous upswing in BD prices in 2010-2011, announced a raft of new capacity and/or expansions for BD.

“These are substantial in magnitude relative to current capacity,” Cook said. “In total, over 400,000 tonnes will be added by 2015.”


The supply and demand balance will change in the US, also a traditional large BD importer.

“There is the potential for the largest import market to substantially decrease in only a couple of years,” Cook said, referring to the proposed start-up date of TPC’s on-purpose 270,000 tonnes/year BD unit in the US.

According to Cook, the US imported 264,000 tonnes in 2011 and 237,000 tonnes of BD in 2012.

It was not so long ago that BD market players were presented with very optimistic expectations of growth amid a tightening supply and demand balance.

“It’s a very different picture going forward. Who would have thought it?,” Cook said.

By: Nel Weddle
+44 20 8652 3214

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