European butadiene producers plot exports to US
Healthy export demands from overseas will keep the huge European butadiene market afloat as local demand wanes, according to a new report by business intelligence group GBI Research.
While the Middle East has downstream plants in the works to produce styrene-butadiene rubber (SBR) and acrylonitrile butadiene styrene (ABS), Europe is expected to rely on the US to fuel its butadiene industry, according to the researchers.
Europe and the Middle Easts demand for butadiene has steadily been increasing over the last decade, primarily led by advanced countries from Western Europe, such as Germany and France.
However, the large populations and growing economies of countries like Russia and other nations of Eastern Europe mean that they also have huge consumption potential.
Europes demand has historically overshadowed that of the Middle East, and this trend is expected to continue in the future. The European region is predicted to account for more than 90% of Europe and the Middle Easts butadiene demand in 2020.
New downstream plants are also due to come online in Iran and Saudi Arabia during the near future, and this is expected to reduce the proportion of butadiene demand from Western Europe in the forecast period.
However, Europes butadiene exports will still grow, due to strong demand from the US, which is increasingly becoming a strong market for European butadiene exports, according to the study.
The newfound love for shale gas in the US is leaving their petrochemicals industry in the dark, as crude oil feedstock for butadiene production goes out of vogue, and Europe is reaping the benefits.
The US is starting to increase its use of shale gas as an energy source instead of crude oil, and since shale gas contains less C4 hydrocarbons (which, when cracked, produce butadiene), the US is experiencing an increasing shortage of locally-produced petrochemicals.
As a result, local butadiene consumers are increasingly relying on foreign imports.
The European butadiene market has not experienced very healthy growth, due to waning local demand. As a result, the increased butadiene demand from US consumers presents a readily available market for European producers.
As the situation stands, European butadiene producers are going to be a major source of supply to North America in future, say the researchers.
Butadiene downstream segments include the polybutadiene, ABS, and SBR sectors.
Butadiene is a raw material used in making a wide variety of synthetic rubbers and polymer resins, and is most commonly used in the production of SBR, which is used to manufacture automobile tires, adhesives, sealants, coatings and other rubber articles such as shoe soles.
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