China Newly Added Butadiene Capacity Springs up

China Newly Added Butadiene Capacity Springs up

In recent two years, China’s new butadiene capacity increased constantly. Except that the butadiene capacity didn’t see notable increases from 2015 to 2016, some new butadiene units went into production in most of the time. Before 2015, most butene ODH units were put into operation. Thereafter, the planned butadiene units were mainly matched ones with big ethylene projects. The capacity scale and cost advantages are relatively obvious, which will impact the butadiene supply and demand pattern in the future.

In 2019, a total of 170kt/a butadiene capacity went into production, including the new butadiene units at Jiutai Energy Inner Mongolia and Nanjing Chengzhi Yongqing Energy Technology. These two new butadiene units belong to butene ODH ones, which are the only two new units using the butene ODH technology in recent two years. In the coming days, the new butadiene units are mostly the matched downstream units of big ethylene projects, and the production technology is mainly C4 extraction technology.

The MTO deep processing project at Jiutai Energy Inner Mongolia started construction in 2013. The company adopts the advanced technology from UOP Company to produce low-carbon olefins from methanol. The 600kt/a olefins project includes 280kt/a PE unit, 320kt/a PP unit and 70kt/a butadiene unit. Therein, the 70kt/a butadiene unit adopts the butene ODH technology. The unit has been tested run in April 2019 and runs normally for the time being. However, affected by the shutdown of its MTO unit, the operating rate of the butadiene unit was relatively low. Its butadiene products mainly flowed into downstream markets in North China and Shandong. As seen from current price spread, available butadiene resources were sparse in East China market. 

The new projects at Nanjing Chengzhi Yongqing Energy Technology mainly include 600kt/a MTO unit and 100kt/a butadiene unit. Therein, the products cover ethylene, propylene, butadiene as well as byproducts ethane, propane, LPG, crude benzene, etc. The units were tested run in June 2019. Its upstream MTO unit was successively tested run and there were qualified products such as ethylene and propylene available. Its butadiene unit will be tested run in late July, and the butadiene products will be supplied normally in August. As the butadiene unit didn’t have matched downstream units. Its butadiene resources were mainly sold to end enterprises via contracts. Spot butadiene resources were relatively limited.

In the coming days, China’s butadiene capacity growth rate will still be high. In the next five years, there will be 2,000kt/a butadiene capacity going into production, including Liaoning Baolai Chemical, Hengli Petrochemical, Zhejiang Petrochemical, Sinopec-KPC (Guangdong) Refinery & Petrochemical, Sinochem Quanzhou Petrochemical, Fujian Gulei Petrochemical, Shenghong Petrochemical Group, Wanhua Chemical Group, Sinopec-SK Wuhan Petrochemical, Sinopec Zhenhai Refining & Chemical Company (phase II), etc. These units are mainly located in East China, and the units located in other regions were relatively sparse. If these units go into production as scheduled, the butadiene supply pattern, import pattern and export pattern will probably be changed notably. 

Many newly added butadiene units will go into production in the future. Thus, market participants will pay high attention to the current industry status. Thus, SCI will issue SCI China Newly Added Butadiene Project Construction Progress Monthly Report to monitor the progress of newly added units. The report includes the general introduction of the project, upstream matched units’ status, production technology and the updates of newly added units. Accordingly, market participants can better grasp the commissioning status of new units and forecast the butadiene market in the future.

.......
More detailed information, please click "Read more".