Global butadiene (BD) supply will remain a key driver in the markets over the next three months. On paper, BD is structurally tight on a global basis, but there are expectations that poor economics and uncertain demand levels will keep operations at ethylene-driven European crackers reduced. Add to this a heavy cracker turnaround slate in the US and in Asia during the spring, and the global outlook for BD crude C4 feedstock supply looks set to remain constrained.
Prices in all regions have firmed considerably since the beginning of 2012 in a replay of events in 2011; supply outweighed by demand, notably in Asia.
However, as with other key petrochemical markets, there are more uncertainties and concerns regarding the ability of key derivatives such as synthetic rubber to pass on costs to end-users in the automotive and construction sectors, and global players appear more cautious than they were this time last year. A couple of tyre manufacturers have already revised their tyre sales projections for 2012 downwards. High fuel prices and poor consumer confidence because of macroeconomic pressures are impacting on car travel and car purchases.