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The Curious Case of Butadiene Monomer - What Lies Ahead?

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by Mohil Pandey
29 September 2013

The advent of shale gas has brought with itself huge volatility into Butadiene (C4) monomer market with prices breaking the shackles of long lasted resistance and reaching levels as high as 4000 USD/MT. The recent shift in feedstock mix to lighter slate such as Natural Gas Liquids (NGLs) in the US and Middle East has resulted in tight supply of C4 worldwide as output yield via this method is relatively low. With more crackers using lighter feedstock slate in the US; does it mean that the prices will escalate? What is in store for Butadiene buyers? The recent turmoil in the monomer market has taken everyone with surprise as prices have spiraled down to very low levels (well below naphtha prices at $ 800-1000/ MT). The need of the hour is to understand how the butadiene market will shape up especially when there are wild swings in prices with a lot of uncertainty. What does the recent dip in the prices during H1 2013 mean? How long will the prices remain this low (below the cost levels)? How will on-purpose butadiene route fit in the scenario? What will be the impact of capacity additions in China and will the growing popularity of green tyre become the trump card?   Author: Mohil Pandey  

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