Butadiene demand in Asia-Pacific not keeping pace with capacity expansion - Argus

ERJ staff report (BC)

Houston – The global butadiene market has seen an unusual amount of volatility over the last year, notes energy and commodity price reporting agency Argus in its “2012/2013 Argus DeWitt Butadiene Annual”. The report indicates that while some supply issues are being addressed by the addition of new capacity in Europe and Asia-Pacific, demand growth in Asia-Pacific is not keeping up with capacity expansion for butadiene and major derivatives, thereby putting pressure on global market prices.

The Annual identifies key trends which will affect global markets and supply dynamics in the 2014-17 forecast period, including:

· US importers will find more butadiene on the market but less C4s, as a result of new butadiene capacity that will come on line in Europe in 2014 and 2015.

· New butadiene rubber (BR) and styrene butadiene rubber (SBR) capacity coming on line in Singapore in 2014 and 2015 will drastically reduce butadiene exports, creating a butadiene supply problem for South Korea.

· China will continue to be the world's largest butadiene consumer with demand growing at 5 percent per annum in 2014-17.

· Most of the global growth in butadiene demand, especially for SBR and BR, will be in Asia-Pacific. But higher regional production may create surpluses of these derivatives at times, which may be exported to the US to support new tire plants.

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