China Butadiene Capacity Expansion Underway

China’s butadiene capacity saw constant growth in recent years. By late 2017, the total butadiene capacity reached 3,709kt/a in China, up 6% Y-O-Y. There will be newly added butadiene units going into production in the coming days, thus the butadiene capacity will further increase in China. China’s butadiene supply pattern will see obvious adjustments in the future.

In 2016, China’s butadiene capacity declined somewhat from 2015, based on the following aspects. No newly added butadiene units went into production in 2016. Some butadiene producers in Shandong changed the butadiene units from butene ODH technology to C4 extraction technology. Thus, the capacity decreased. For instance, the 100kt/a butene unit at Shandong Huayu Rubber and the 100kt/a butene ODH unit at Shandong Wanda Petrochemical was changed the production process to C4 extraction technology, and the capacity dropped to 60-70kt/a. Besides, some butadiene units were shut for a long time or dismantled such as the butadiene units at Beijing Dongfang Chemical and Bluestar (Tianjin) Chemical.

In 2017, China’s butadiene capacity rallied constantly. The newly added units included the 100kt/a butene ODH unit at Jiangsu Sailboat Petrochemical, the 64kt/a butadiene unit at Shenhua Ningxia Coal Industry and the 50kt/a unit at Puyang BuleStar New Material. These three units maintained normal operation for the time being. Therein, Jiangsu Sailboat Petrochemical mainly provided the butadiene resources to downstream plants who had signed the contracts directly. The butadiene resources at Puyang BuleStar New Material and Shenhua Ningxia Coal Industry flowed into the market normally. The supply was relatively stable. As seen from the current running status, the monthly butadiene supply increased by 13-14kt.

In 2018, the 180kt/a butadiene unit at CNOOC and Shell Petrochemicals has been put into operation, and its operating rate has reached over 50%. The butadiene resources are mainly delivered to downstream plants who have signed the contracts directly. Jiutai Energy Inner Mongolia plans to finish the construction of its newly added butadiene unit in Q3, 2018. The commissioning date will be late 2018 if all goes well. The 1,400kt/a ethylene project and related projects at Zhejiang Petrochemical are planned to go into production in late 2018. The oil refining unit will be introduced into crude oil in November, 2018 and its downstream units will be put into operation in 2019.

As seen from other units, the 1,500kt/a ethylene project at Hengli Petrochemical is planned to go into production in 2019. The capacity of its matched butadiene unit is 150kt/a. Liaoning Baolai Petrochemical plans to put its 120kt/a butadiene unit which is the matched unit of the 1,000kt/a cracking unit into operation in 2019. However, there is no new progress heard for the time being. Besides, other projects such as those at Sino-Kuwait Guangdong Integrated Refinery & Petrochemical, Sinochem Quanzhou Petrochemical and Fujian Gulei Petrochemical are planned to go into production in 2020 or after 2020.

According to SCI, China’s butadiene capacity will probably increase by more than 1,500kt/a by 2022. At that time, China will be fully self-sufficient in butadiene or some butadiene resources will probably be exported to other countries. The import volume in H2, 2018 will slide notably compared with the same period of last year. Especially in Q2, 2018, the import volume stays at lows due to high-priced imported butadiene resources. In 2018, the butadiene self-sufficient ability will improve from 2017, replenished by the newly added units.