Updated to mid-November 2009
Asian market review by Heng Hui, ICIS pricing
Asian butanediol (BDO) prices increased from $1,400-1,450/tonne CFR (cost and freight) CMP (China Main Port) in mid-August to $1,500-1,550/tonne CFR CMP for bulk cargoes by mid-November, driven largely by increasing feedstock costs.
Drummed cargoes in China similarly increased from around $1,600-1,650/tonne CFR CMP to $1,650-1,750/tonne CFR CMP.
Delivered contract prices in northeast Asia (NE Asia) increased by $100-180/tonne, with the range narrowed from $1,470-1,700/tonne in mid-August to $1,650-1,800/tonne by mid-November.
High production costs meanwhile left suppliers with little leeway but to increase their offers despite weak demand. The situation seemed to be particularly acute for producers who used propylene and butadiene as feedstocks.
Faced with extremely thin Chinese demand and current low buying ideas, many of the regional producers had lowered operating rates and avoided the key Chinese market. The Chinese market was still considered generally oversupplied, due to healthy operating rates of local producers, and impending starts from new plants or restarts from turnarounds.
European market review by Truong Mellor, ICIS pricing
The European BDO market was quiet in August, owing to the traditional summer slowdown. Sources agreed that supply was long due to weak demand in Q3, and there was talk of several producers going into turnaround.
Buying interest from the automotive industry saw an upturn on the back of government-led subsidy schemes, but many players remained anxious regarding the long-term sustainability of these programmes and the return of true demand.
Fourth-quarter contracts were assessed at €1,435-1,670/tonne FD (free delivered) NWE (northwest Europe), an increase of €40-80/tonne from previous levels. Players cited squeezed margins, feedstock increases and growing market tightness as the key factors. Producers had originally targeted increases of €100-150/tonne.
Supply was said to still outweigh demand despite the reduced output and idling of plants, but sources agreed that the polyurethane sector was starting to show clear signs of improvement.
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Butanediol
Uses and Outlook
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.
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Butanediol
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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