Butadiene also known as 1,3-butadiene is used primarily as a monomer in the manufacture of synthetic rubbers – its largest single use is in the production of styrene butadiene rubber (SBR) which is principally used in the manufacture of automobile tyres. Other synthetic rubbers include polybutadiene rubber (PBR) – tyres and plastics such as acrylonitrile butadiene styrene (ABS), polychloroprene (neoprene) – gloves, wetsuits and foams and nitrile rubber (NR) – hoses, gloves, seals.


According to European statistics agency Petrochemicals Europe, European production of butadiene has increased year-on year since 2013 and hit the 2m tonne mark in 2015 – the highest output since 2011 – although this can be explained by the new capacities that were brought online in the latter part of 2014 and into 2015. Output in 2015 was about 71% of available nameplate capacity and production in 2016 is likely to be around 7% higher. Demand growth for the year was likely to be close to 1% so most of the incremental supply has gone into exports to Asia and the US.

A pattern of improved demand and higher pricing led to first increase in monthly contract prices since July 2015 which came in April 2016. Europe’s supply was then constrained through planned and unplanned outages and hiccups at crackers as well as BD extraction units which counteracted a demand dip in Asia. However, domestic consumers still sought out dwindling spot supplies and prices remained above the prevailing contract price levels.

Firmer feedstock values supported further increases in the contract price – the turnarounds were over but renewed demand from Asia was starting to again support trader sentiment.

Although supply issues during the second quarter had been resolved, other planned turnarounds, unexpected hiccups and heat constraints kept output constrained. Domestic demand was healthy, while firming prices in Asia and in the US keep demand for export at a high level as well.

With European supply remaining tight, and with renewed buying appetite from both domestic and Asian buyers, domestic spot prices surged ahead through the month and further increases were seen in contract prices.

Maintenance turnarounds, unplanned issues and ongoing restrictions on crude C4 output kept BD output constrained, but even when availabilities improved towards the end of the year, strong demand from the export sector amid soaring Asian prices kept competition for all available spot tonnes fierce.

Larger gains were secured on the contract price – in November settling at its highest level since November 2014. The strong demand, tight supply situation showed no signs of abating as the market moved into the year-end, rather the opposite as Asian demand strengthened further as local derivative demand surged ahead of the Chinese lunar New year in late January and in Europe, the 2017 turnaround season was due to get off to an early start.

There was a brief respite for domestic contractual consumers in December, with the contract price rolling over, the softer upstream market was offset by the tight market conditions.

Spot prices rose considerably through December and escalated into January 2017 and the demand on European supply was extreme. A €140/tonne increase for the January contract was dwarfed by the highest ever increase for February – €460/tonne, taking the contract price to its highest level since June 2011.


Most BD is obtained a by-product in the steam cracking of naphtha to make ethylene and propylene. The feedstock determines the yield: light feedstock yields five times less BD than heavy feedstock.

Other processes include the dehydrogenation of purified n-butene or butanes from steam crackers or C4 refinery streams.

A few companies continue to look at bio-based routes for example – Genomatica in partnership with Versalis and Braskem and LanzaTech partnered with INVISTA. Cobalt Technologies announced partnership agreements with two undisclosed Asian companies. Tyre manufacturers are also investigating the biomass route such as Michelin’s is collaboration with Axens and Tereos


Some increase in BD production is expected for 2017 and 2018 but this will very much depend on Crude C4 availability and average operating rates are unlikely to move much above 80%. Demand growth is expected to remain around 1% in 2017 and net exports may increase towards 350,000 tonnes.