Chemical Profile: Butadiene

Source: CMR

2006/05/21

Chemical Profile: Butadiene

May 22-28, 2006

Producer Capacity*
Equistar Chemical, Channelview, Tex. 865
Equistar Chemical, Chocolate Bayou (Alvin), Tex. 150
Equistar Chemical, Corpus Christi, Tex. 200
ExxonMobil, Baton Rouge, La. 385
ExxonMobil, Baytown, Tex. 325
Huntsman, Port Neches, Tex. 850
Innovene, Chocolate Bayou (Alvin), Tex. 220
Sabina Petrochemicals, Port Arthur, Tex. 900
Shell Chemical, Deer Park, Tex. 320
Shell Chemical, Norco, La. 575
Texas Petrochemicals, Houston, Tex. 1,200
TOTAL 5,990

*Millions of pounds per year of finished butadiene capacity. Virtually all butadiene is produced as an ethylene steam-cracking coproduct, with yield depending on feedstock, typically ethylene or naptha. Not included above is Texas Petrochemicals’ capacity (460 million pounds) to produce butadiene by butylene dehydrogenation. This unit is presently idle, as economic conditions do not justify its operation.

Last month Huntsman entered into an agreement to sell the assets comprising its US butadiene and MTBE businesses operated by its Base Chemicals SBU. The sale to Texas Petrochemicals is expected to close by the third quarter.?BP formed Innovene as a separate entity in April 2004, which comprises BP’s former olefins and derivatives businesses. In December 2005, BP sold Innovene to Ineos, a UK-based private chemicals company.

Sabina Petrochemicals is a 60/24/16 joint venture between Shell, BASF and Arkema (previously AtoFina Petrochemicals), adjacent to the BASF-Atofina steam cracker that was brought on line in 2001. Butadiene production began in March 2004.

Equistar Chemical Company is part of Lyondell Chemical Company.

PROFILE LAST PUBLISHED 6/23/03; THIS REVISION,5/22/06.

DEMAND

2004: 4.995 billion pounds; 2005: 4.915 billion pounds; 2009: 5.215 billion pounds, projected. Demand equals production plus imports (2004: 786 million pounds; 2005: 641 million pounds) less exports (2004: 28 million pounds; 2005: 28 million pounds).

GROWTH
 

Historical (2000–2005): -0.3% (negative) per year. Future: 1.5% per year through 2009.

PRICE

Historical (2000–2005): High, 51c. per pound, contract, tanks, del., Gulf; low, 13c. per pound, same basis. Current: 48c. per pound, same basis. Current spot price: 49c. to 51c. per pound. Source: Icis Pricing

USES
 

Elastomers, 61% (styrene-butadiene rubber [SBR], 30%; polybutadiene, 25%; polychloroprene, 4%; nitrile, 2%); styrene-butadiene latex, 12%; adiponitrile for HMDA, 11%; ABS resins, 5%; miscellaneous, 11%. Source: CMR

MARKET PERSPECTIVE

Butadiene demand is largely driven by synthetic rubber, accounting for 61% last year in the U.S. Within this sector SBR and polybutadiene consume 30% and 25% of butadiene respectively.

SBR’s superior abrasion resistance and favorable cost/performance balance versus polybutadiene and natural rubber assure that it will continue to be used in large volume for production of tires and tire products. But in recent years SBR consumption has been declining at a greater rate than has passenger tire production. This is attributed to the decline of domestic passenger car production (lost market share to imports), automobile downsizing (but somewhat offset with the SUV popularity), and imported vehicle tires. With automobile and light truck production projected to be essentially flat, taking about 50 million tire units per year, SBR growth will largely come from replacement tires and truck retreads. Non-tire automotive uses are growing, particularly in replacement parts, since the driving life of the average passenger car continues increasing. For aggregate SBR growth, the forecast is 1.3% per year.

 

Tire products have been the mainstay of polybutadiene since its introduction in 1960, where it competes with natural rubber. In recent years, impact modification of plastics, particularly polystyrene and ABS, have become an important outlet for polybutadiene. Polybutadiene is growing at approximately 1.8% per year.

OUTLOOK

Elastomers will continue to be the largest consumer of butadiene and should maintain their position of 61% of total consumption. However, they are mature products that are heavily reliant on the automotive industry. Adiponitrile/hexamethylenediamine (HMDA), styrene-butadiene (SB) copolymer latex, acrylonitrile-butadiene-styrene (ABS) resins, styrenic block copolymers and other smaller polymer applications will grow faster than the elastomers (excluding polybutadiene), but they each account for only 5–10% of the total butadiene market. With a projected average annual growth of 1.5% during 2005–2009, the total market for butadiene in 2009 will reach 5.2 billion pounds.