Butanediol (BDO) is a valuable chemical intermediate used in the production of high performance polymers, solvents and fine chemicals. The BDO chain has three main branches – polymers, tetrahydrofuran (THF) derivatives and gamma-butyrolactone (GBL) derivatives. 
When converted to THF, its highest volume derivative, BDO is used to produce polytetramethylene ether glycol (PTMEG) which is used mainly in the production of spandex fibres as well as thermoplastic polyurethanes (TPU) and copolyester ether (COPE). THF is also used as a solvent in the manufacture of polyvinyl chloride (PVC), cements and coatings, and in precision magnetic tape.
The production of GBL provides the feedstock for N-methyl-2-pyrrolidone (NMP) and 2-pyrrolidone as well as being used in the agrochemicals and intermediates markets. NMP is a high performance solvent used in the electronics industry, lube oil extraction, paint strippers, magnetic wire coatings and engineering resins. 2-Pyrrolidone is an intermediate used in pharmaceutical manufacture, cosmetics, hair spray, germicide and tablet binders, and finds its way into high value polyvinyl pyrrolidone polymers.
BDO is used in the manufacture of polybutylene terephthalate (PBT). PBT has been growing at healthy rates, principally consumed in engineering plastics for the automotive and electronics industries.
Long-term growth in Europe is expected to be 4%/year. Demand in the first half of 2008 was good with PBT and TPU markets performing well although the spandex fibre market was weak. However, demand slowed considerably in the second half of the year as the credit crisis and destocking took effect. It is hoped that the market will return to traditional growth rates post 2009.
In the US market, BDO has grown at an average rate of nearly 3%/year over the past five years. Although its big end uses such as THF derivatives, GBL derivatives and PBT resins are becoming mature industry sectors, the BDO market is still expected to outperform GDP growth.
BDO demand in the US is projected to grow at 2%/year through to 2012, according to ICB. Domestic demand will increase from 392,000 tonnes in 2008 to 424,000 tonnes in 2012. Imports in 2008 were 32,000 tonnes while exports were 82,000 tonnes.
With US supply and demand balanced to tight, and no BDO capacity expansions underway, imported product is expected to become more important over the forecast period.
New capacity for BDO and derivatives in Asia could stimulate the market and encourage new investment in derivatives. Long term demand growth in Asia is estimated at 7-9%/year with China up to 10%/year. India has a strong history of polyester fibre production and could emerge as a major PBT and spandex producer.
In addition, the shift away from the acetylene-based Reppe process to cheaper routes, using propylene, butadiene or butane feedstocks with improved process economics, should improve operating margins for manufacturers.
However, overcapacity has become a challenge for BDO producers. In China, Xinjiang Markor Chemical started up a 60,000 tonnes/year plant in 2008 while Blue Star Nanjing completed its 55,000 tonnes/year project. Shanxi Shanhua is expected to start up its 75,000 tonnes/year plant in 2009. China has become self-sufficient in BDO which may lead to other Asian producers to export to European and US markets.
South Korea’s SK Energy also commissioned a 40,000 tonnes/year plant in 2008. However, BASF has closed its 50,000 tonnes/year BDO and THF units in Ulsan, South Korea.
Overall capacity in 2008 was about 1.65m tonnes/year with demand around 1.2-1.3m tonnes. Consolidation of older and non-integrated plants is expected.
(Updated: March 2009. Source: ICB Chemical Profiles, 2 March 2009 and 26 January 2009)
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Process Technologies
The first commercial route to BDO was based on Reppe process which involved the reaction of formaldehyde with acetylene and subsequent stages of hydrogenation to produce BDO. However, it required careful handling of acetylene. BDO made in this way provided one of the chemical routes to butadiene developed during World War II to support synthetic rubber production.
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