US BD production to bottom out, then rebound – consultant

11 December 2013 15:48  [Source: ICIS news]

HOUSTON (ICIS)--US butadiene (BD) production will bottom out in the next few years because of increased ethane cracking before rebounding on new cracker capacity, a consultant said on Wednesday.

US BD production is expected to bottom out at 6.0m lb/day (2,722 tonnes/day) as increased ethane cracking lowers production of BD, said Dan Lippe, managing partner of Petral Consulting. He made his comments at the 1st ICIS US Butadiene & Derivatives Conference.

However, by 2020, US BD production is expected to rebound to 7.0m-7.5m lb/day as 6-7 new US ethane crackers are brought on board.

The focus on ethane crackers is tied to production cost advantages for ethylene production, as cracking ethane gives US producers a 15-35 cent/lb advantage over naphtha-based production, Lippe said.

Although BD imports are expected to increase based on tighter US supply, Lippe said they will not offset the loss of domestic production.

However, weaker demand for BD could ease some of the expected market tightness.

By: John Dietrich

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