Butadiene

22 February 1999 00:00 [Source: ICB]

World operating rates look set to rise to try and keep pace with demand, which will continue to rise well into the next millennium.

Supply/demand

Europe and Asia crack heavier feeds than the US and are the worlds major C4 exporters. North America is the world's largest importer of butadiene and the major destination for European exports. However, there is little incentive to export spot volumes at the moment because of depressed US prices, high US inventories and firmer transatlantic freights.

Uses

Butadiene is a key raw material for the manufacture of synthetic rubbers. Around 7.4m tonne of butadiene is estimated to have been consumed globally in 1998 with around 63% of this used in the production of chloroprene rubber, nitrile rubber, polybutadiene rubber and styrene butadiene rubber. The latter is the largest consuming segment, taking 31% of world demand. The fastest growing application is for the manufacture of adiponitrile, used to produce nylon 6,6 which, according to CMAI, is increasing at 5.8%/year.

Technology

The major source of butadiene is from steam crackers although butenes can be dehydrogenated to butadiene when economics allow. The butadiene is extracted from the C4 cracker stream using extractive distillation where the butadiene is dissolved in an aqueous solution of a solvent and withdrawn from the bottom of a distillation column. In a second column, butadiene is separated from the solvent before final purification.

Health and safety

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Exposure to 1,3-butadiene gas can irritate the eyes, nose and throat while breathing the vapour can cause sleepiness and lightheadedness. Butadiene is suspected to be a carcinogen in humans and all contact should be reduced to the lowest possible level. It is a highly flammable and reactive liquid/gas, and containers may explode in a fire.

Pricing

European contract prices have been agreed at E245/tonne for Q1, equivalent to DM479/tonne FD. This is DM41/tonne lower than in quarter four 1998 and DM226/tonne lower than in quarter one 1998.

Pressure on butadiene prices has come from weaker crude oil and naphtha prices and from oversupplied global downstream SBR and ABS where margins are depressed. Softer butadiene prices in both Asia and North America are also hitting European prices.

The first US contracts for February have been agreed at a rollover of the January level at 15 cent/lb, equivalent to $331/tonne, but spot prices are around 2.5-3 cent/lb lower.

Butadiene prices are expected to show little change during 1999 although this will depend on developments in crude and naphtha pricing. Longer term new capacity additions in Asia are creating a very competitive market and could have a negative impact on European and North American pricing.

EUROPEAN BUTADIENE CAPACITY, '000 TONNE/YEAR

Western Europe

Erdölchemie

Cologne, Germany

245

Oxeno

Marl, Germany

145

BASF

Mannheim, Germany

BSL Olefinverbund

Bohlen, Germany

Elenac

Wesseling, Germany

170

Dow

Terneuzen, Netherlands

170

Shell

Moerdijk, Netherlands

115

DSM

Geleen, Netherlands

120

EniChem

Ravenna, Italy

130

Brindisi, Italy

120

Marghera Butadiene

Porto Marghera, Italy

AP Feyzin

Feyzin France

Atochem

Gonfreville, France

Naphtachimie

Lavéra, France

120

Exxon

Notre Dame de G, France

Shell

Berre, France

ICI

Wilton, UK

100

BP Chemicals

Grangemouth, UK

Repsol

Puertollano, Spain

Tarragona, Spain

Borealis

Sines, Portugal

Porvoo, Finland

OMV

Schwechat, Austria

Eastern Europe

Arpechim

Pitesti, Romania

FSK

Zrenjanin, Yugoslavia

Kaucuk

Kralupy, Czech Republic

MZRiP

Plock, Poland

Neftochim

Burgas, Bulgaria

Petro Borzesti

Borzesti, Romania

100

SOURCE: CMAI

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