CEH Report

Table of Contents

Abstract

The major markets for 1,4-butanediol are tetrahydrofuran (THF), polybutylene terephthalate (PBT), gamma-butyrolactone (GBL) and polyurethanes. BASF, Dairen Chemical Corp., LyondellBasell and ISP together account for 58% of world 1,4-butanediol capacity in 2010.

The butanediol industry has been growing at an average of one and a half to two times GDP.

The following pie chart shows world consumption of 1,4-butanediol:

Seventy percent of consumption in Other Asia is accounted for by Taiwan. The Republic of Korea and Malaysia account for the remainder of Other Asian consumption.

The 1,4-butanediol industry has attracted some significant investment in recent years, most notably by BASF in Asia (Malaysia), Dairen in Asia (Taiwan and China), Gulf Advanced Chemical Industries in Saudi Arabia, Lyondell in Europe and Koch's purchase of INVISTA's 1,4-butanediol assets from DuPont. Most capacity additions have been predominantly in China in recent years. Capacity buildup in Other Asia is expected to remain flat in the next few years.

About two-thirds of 1,4-butanediol production is used captively; about half of the noncaptively used 1,4-butanediol is tied up in long-term contracts ranging from five to seven years. The industry is moving away from sole sourcing and long-term contracts beyond ten years.