The vast majority of butadiene is extracted from the crude C4 coproduct of ethylene. CMAI experts forecast the crude C4 market balance to tighten globally from 2008-2013. Global supply production will be enough to meet demand, but regional market differences will continue. In North America, crude C4 availability will limit butadiene production as a lightening of ethylene cracker feed slates and limited imports restrict availability. Crude C4 supply will also be an issue in Northeast Asia as ethylene feed slates in the region shift to LPG's and operating rates come under over supply pressure.
Growth is expected to be most rapid in Asia, with more developed markets like North America and West Europe experiencing slow to flat growth over the next five years. Global butadiene demand is expected to grow at a pace lower than the 3.2 percent annual rate experienced over the past five years. For example, the outlook for worldwide butadiene in its largest end-use sector, the production of commodity based synthetic rubber and latex, is anticipated to only average around 2 percent per year. A slowing global economy is also causing slower demand for rubber goods, especially in the automotive sector.
As the butadiene market shifts to Asia, the vast majority of new butadiene production and consumption plants will be located in this region. More than 80 percent of global butadiene capacity additions planned between 2008 and 2013 will be located in Asia, mostly in China. Nevertheless, projections for the continued rapid growth of butadiene demand in the region will cause Asia to remain a net importer. Operating rates are expected to be somewhat lower than the extremely high levels of the past three years, as projects, especially those planned for three to five years out, experience typical delays from their stated schedules.
Chemical Market Associates, Inc. (CMAI) has completed the 2009 World Butadiene Analysis, an annual global study that covers the future outlook for supply, demand, production, capacity, trade, pricing and profitability of the global butadiene and derivatives industries for the period 2003 to 2013.