 Demand from the automobile, household appliance and shoe manufacturing industries in China will continue to grow, helping to maintain a healthy Butadiene market in the country. Low production costs and the increasing price gap between crude oil and final Butadiene product are providing high profits for manufacturers. Butadiene is a key raw material for the production of both synthetic rubber and synthetic resins used in a variety of applications. Despite an added 330,000 tonne/year of capacity that came on stream in 2006 (Zhonghai Shell:155,000 t/y; Lanxing Petrochemical: 30,000 t/y; Maoming Petrochemical: 100,000 t/y; and Lanzhou Petrochemical: 45,000 t/y), Butadiene supply is expected to remain tight through mid-2009. At that time, several new Ethylene production facilities that will also produce Butadiene will be operational. Demand and supply should come into balance by 2010, according to industry analysts. |
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