China Drying News reported that at the end of 2012, the butadiene market ended with the market prices of Panjin Ethylene and Qixiang Tengda. There is reason to believe that butadiene will enter 2013 with a good start.
In 2012, the market for butadiene encountered “Waterlooâ€, and the price was slumped. From February’s high of 27,000 yuan (t price, the same below), all the way down to around 12,000 yuan in early December. The main reasons are: First, the end demand is not enough, the automobile and tire industries are sluggish; second, the influx of foreign products, the annual import volume is expected to be 260,000 tons, an increase of more than 40%; Third, multiple projects to release production capacity, Qixiang Tengda 100,000 tons/year, Fushun Petrochemical 120,000 tons/year, Daqing Petrochemical 90,000 tons/year and Chengdu Ethylene 150,000 tons/year have been put into operation.
Nevertheless, compared with other chemical products, butadiene is still one of the most "money" products, even at the lowest point, the profit space is also 2000 to 3,000 yuan, strong resistance to market risk. In the bulk of chemical raw materials, butadiene is still the most favored chemical raw material for market players in 2013.
Rising demand for rigidity
The main downstream products of butadiene include butadiene rubber, styrene-butadiene rubber and ABS resin, which accounted for 37%, 33% and 12% respectively. Butadiene is the only raw material for butadiene rubber, and the proportion of butadiene for styrene butadiene rubber is 70%. Driven by the rapid development of the automobile and other industries, the production capacity of styrene-butadiene rubber and butadiene-butadiene rubber expands rapidly. SBR, with a domestic capacity of 1.1 million tons in 2009, escalated to approximately 1.7 million tons in 2012; butadiene rubber production capacity also burst out in 2012, with Maoming Petrochemical 100,000 tons/year, Chengdu ethylene 150,000 tons The newly-built devices, such as the annual Huaneng and Shandong Huayu, are listed in the production plan, and the new production capacity will reach 800,000 tons/year. Although the operating rate of the equipment was affected under the low demand of terminals, the rigid demand for raw material butadiene in these new and old devices has already reached a scale and will maintain a high level in 2013.
Resources are becoming scarcer
Compared with the rapid expansion of the production capacity of styrene butadiene rubber and butadiene rubber, the growth rate of butadiene supply capacity has lagged behind. As a by-product of the naphtha cracking of ethylene, only the ethylene plant is put into operation and must be a naphtha cracking process to produce butadiene. At present, only such large-scale petrochemical enterprises as China Petroleum and Sinopec have such production capacity. In 2011, the new ethylene production capacity was 2.5 million tons. In 2012, the new ethylene production capacity was 6.5 million tons. In 2013, the new ethylene production capacity was reduced to 2 million tons. At the same time, a new process of cracking ethylene with shale gas and petroleum gas has emerged in foreign countries. The cost is reduced by nearly half compared to the current naphtha method, but this new process does not produce butadiene by-products. As a result, butadiene production will become increasingly scarce in the future as manufacturers use a cheaper cracking ethylene process. People optimistically predicted that the butadiene market in 2013 will have a more optimistic trend than 2012.
There is room for price increases
Because of the small supply flexibility and the large downstream demand, butadiene has always been a hot spot for traders and rubber companies, and prices can often go beyond unexpected curves and highs. From the point of view of profitability, the overall profitability of the synthetic rubber industry has rebounded. Compared with other products, it is a high-value-added product and has a stronger ability to withstand the price increase of raw materials. According to statistics, in 2012, the gross profit of the rubber products industry was close to the historical high in 2009, so the high price of butadiene will not have a particularly significant impact on the downstream. In 2013, butadiene prices still have room for further improvement.
The economic environment improves
The economy of 2013 was better than 2012. According to the prediction of authoritative departments, at present, China's macroeconomic growth has shown signs of stabilization and recovery. With the warming of the macro economy, the pressure on micro-enterprises will quickly ease. The growth rate of the world economy in 2013 will not show much fluctuation compared with 2012, and it is more likely to be roughly flat or slightly up. At the same time, U.S. monetary policy continued to be loose, and the Fed successively introduced QE3 and QE4, and the probability of maintaining high crude oil prices is high, which will support the rebound of butadiene prices from costs.
However, there are still some unfavorable factors in 2013, putting pressure on the butadiene market. On November 1, 2012, the U.S. labeling law was formally implemented, covering almost all tires, and forcibly importing and selling non-compliant tires. Although a few countries are currently implementing the labeling method, once they are fully implemented globally, they will affect 56% of China’s exports of passenger car tires and 23% of exports of heavy-duty tires, affecting a total amount of US$5 billion, which will account for total domestic tires. 15% of the output value will be a very serious impact on the domestic tire industry, which will in turn affect the strength of butadiene and downstream rubber products. In addition, a series of problems such as labor costs, shortage of funds, and obstruction of exports will continue to suppress chemical markets including butadiene.
In summary, in the long-short intertwined, the butadiene market in 2013 will be favorable or will become the dominant, especially under the support of factors such as increasing demand, resource constraints, etc., butadiene is expected to submit a satisfactory answer sheet.
Metal Cabinet,Metal Enclosure,Metal Case
Sheet Metal Fabrication Co., Ltd. , http://www.challmetal.com