CEH Report

Table of Contents

Abstract

Butadiene is a conjugated diene used as a monomer in the production of a wide range of polymers and copolymers, as well as in the production of several intermediate chemicals. The largest single use for butadiene is in the production of styrene butadiene rubber (SBR), which is principally used in the manufacture of tires. It is also used in common plastic materials such as telephones and carpet backing and rubber materials such as nitrile rubber hoses, footwear and neoprene wet suits.

Butadiene demand is strongly influenced by ethylene and energy markets as well as general economic cycles. Given current market conditions, projections included in the report are best estimates at the time of publication and can change depending upon economic conditions.

The start-up of olefin complexes in developing nations during the 1980s and 1990s exacerbated an oversupply of butadiene. Olefin plants in countries such as Brazil, Libya, Taiwan, the Republic of Korea and Singapore primarily consume heavy liquids for ethylene production. For lack of significant domestic butadiene consumption, producers in these areas historically made their coproduct C 4 stream available for export markets. This gradually changed, however, as derivative markets increased. Since the late 1990s, growing demand for rubber products and other polymers in Asia and decreasing supply of natural rubber sources have increased butadiene demand exponentially.

The following pie chart shows world consumption of butadiene:

Elastomer production represents 60–70% of world butadiene demand, with the majority consumed in tires. Demand for butadiene in tires depends on a variety of factors including vehicle production, tire design (tread wear, performance, operating conditions, etc.) and the price of competitive elastomers, including natural rubber. Additional consumption of both ABS resins and SB copolymer latexes, each accounting for approximately 12% of total consumption, is used in automobiles, appliances, paper products and carpeting.

In 2008, global butadiene demand dropped an estimated 5.1% from 2007 values as a result of the economic downturn. Demand is expected to decline further through 2009 before the economy and butadiene markets improve. The estimated average annual growth in demand will be 2.7% per year to 2013.