Butadiene output in Europe is expected to overtake demand for the first time since 2000 due to lower demand from the automotive industry, according to GBI Research’s latest report. Last year, Europe’s demand for butadiene was 2.5 million tonnes while production was 2.23 million tonnes. However, this disparity is expected to reverse in 2015 when production will outpace demand by 162,953 tonnes.
According to the European Automobile Manufacturers’ Association, European car sales have shrunk for nine consecutive months in 2012, and truck demand has reduced over the last five months. Furthermore, it forecasts that passenger car sales in the EU will shrink 7% this year to 12.2 million vehicles, 21% below the 2007 peak, with the weakest demand since 1995. The deflated demand for new cars has had an effect on butadiene demand in Europe. However, suppliers companies are not reducing production but increasing it to cater to the export market. Major butadiene production capacity additions include LyondellBasell’s expansion of its extraction unit in Wesseling, Germany, and Versalis’s plans to build a new 70,000 tonne/year unit at its Dunkirk site in France. Last year’s global demand for butadiene was 10 million tonnes and GBI Research expects this to grow to 14 million tonnes by the end of 2020, representing a Compound Annual Growth Rate (CAGR) of 3.9%. Asia-Pacific is expected to continue as the world’s highest butadiene growth sector with demand to reach 8 million tonnes before the end of decade.
(RJA)