Global butylenes markets are very complex and interrelated. In most cases, butylene supply is determined by process economics further up the value chain without significant influence from actual changes in butylene demand, as per Chemical Market Associates, Inc. (CMAI). The most recent example is the shift of flexible ethylene crackers toward lighter feedstocks in response to changes in the relative prices of crude oil and natural gas. In North America, the strong incentive to crack ethane has reduced the use of heavier feedstocks and, as a consequence, the supply of raffinate-1 and raffinate-2. The overwhelming issue facing the market, therefore, is the availability and quality of the crude C4 coming from the ethylene crackers.
Supply of butylenes nonetheless should be sufficient to meet demand on a global basis, although some regional markets will not be as well balanced. Raffinate-based butene-1 production in the U.S., for example, is under pressure from feedstock limitations, but globally the addition of significant ethylene-based butene-1 production capacity should keep the market well supplied.
Demand for butylenes derivatives decreased in 2009 from previous highs, often achieved in 2007, due to the impact of the global economic recession. However, the forecast period (2009–2014) will see a return to healthy growth for most butylene derivatives. Butene-1 demand growth has turned positive as recovery from the global recession is underway. High purity isobutylene (HPIB) similarly will continue to enjoy solid growth supported by IIR demand into the tire markets. Global MTBE markets have recovered from the removal of MTBE from the U.S. gasoline pool and returned to solid operating rates and attractive margins. The rise of the ETBE market is causing some uncertainty in the MTBE markets, although the global MTBE market is expected to remain much larger than the ETBE market. However, from a butylene perspective, the split between MTBE and ETBE is largely irrelevant, since both products consume raffinate.