BERLIN (ICIS)--Even if some industry estimates of a 2% per annum butadiene (BD) demand growth are to be trusted, global supply would still be adequate through to 2020 “providing new cracker capacities were completed on time”, according to Stephen Bowers of Evonik Industries on Tuesday.
Speaking at the 5th ICIS European Butadiene & Derivatives Conference, Bowers said that new cracker capacity in the US could be expected to provide 300,000 tonnes of extra BD, while new additions in the rest of the world could add about 1m tonnes.
However, if this new supply is delayed or BD demand growth exceeds 2%, then the global BD market could be in a shortfall position post 2018.
Bowers estimated that as much as 2.5m tonnes of BD worldwide was not recovered in 2015, with the crude C4 (CC4) BD feedstock being co-cracked or hydrogenated either because of economics or because it is stranded, so there were potentially other opportunities to increase BD supply should the need arise.
He added that the most extreme example of stranded BD is Sadara. The Dow, Saudi Aramco joint venture mixed feed cracker started operations last month, producing CC4. But with no local consumer, 30 miles from port and with no infrastructure, shipping the BD would be an extremely expensive option.
Regarding demand, Bowers said that the oversupply in natural rubber remains a threat to BD demand – natural rubber being a substitute in certain key BD derivative synthetic rubber applications – and that the natural rubber market is not widely expected to re-balance before 2020.
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