The European petrochemicals industry

Healthy export demands from overseas, including the US, will keep the huge European butadiene market afloat, as local and domestic demand slides, according to a recent report from GBI Research.

The report says that while the Middle East has up and coming downstream plants to produce styrene butadiene rubber and acrylonitrile butadiene styrene, which promise to encourage the butadiene industry in the region, Europe is relying on US demand to keep its butadiene industry afloat.

Europe and the Middle East’s demand for butadiene has been increasing over the last 10 years. This has been 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.

In the past, the demand from Europe has been much bigger than that of the Middle East, and this trend is expected to continue with European demand being more than 90% by 2020. New downstream plants are also due to come online in Iran and Saudi Arabia and this is expected to reduce the proportion of butadiene demand from Western Europe in the forecast period. However, Europe’s butadiene exports will still grown, due to strong demand from the US, which is increasingly becoming a strong market for European butadiene exports.

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, 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 been experiencing very healthy growth, due to waning local demand, and so the increased butadiene demand from US consumers present as 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.

Butadiene downstream segments include polybutadiene, ABS and SBR sectors. Butadiene is a raw material used in making a wide variety of synthetic rubber 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.

Adapted from press release by Claira Lloyd.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/26102012/european_petrochemicals_industry/