Butadiene in China: New Suppliers & Changes of Raw Material Patterns

By Tan Jie, China Petroleum & Chemical Corporation

1. Production

In 1971, Lanzhou Petrochemical Co., Ltd. built the first commercial butadiene unit in China with acetonitrile-process (ACN) technology developed and designed in house. Later, Jilin Petrochemical Co., Ltd. and Beijing Yanshan Petrochemical Co., Ltd. also constructed butadiene units. In 1976, Beijing Yanshan Petrochemical Co., Ltd. introduced dimethylformamide (DMF) technology from Nippon ZEON and built a butadiene unit with DMF as solvent. In the 1980s, four other butadiene units were constructed by Daqing Petrochemical Co., Ltd., Qilu Petrochemical Co., Ltd., Yangzi Petrochemical Co., Ltd. and Shanghai Petrochemical Co., Ltd.
The completion or expansion of several ethylene units in recent years has provided great quantities of C4 raw material for the development of butadiene. The demand among makers of synthetic rubbers and resins has also increased rapidly. So quite a few butadiene units have been built in China in recent years.
In 2012, a 100 kt/a butadiene unit using the butene oxydehydrogenation (ODH) process was completed and put on stream by Shandong Zibo Qixiang Tengda Chemical Co., Ltd. It was the first butadiene unit in China not using the C4 extraction process. Fushun Petrochemical Co., Ltd. and Daqing Petrochemical Co., Ltd. also expanded their butadiene capacity. In 2013, the 130 kt/a butadiene unit in Sinopec SK (Wuhan) Petrochemical Co., Ltd. started production. In 2014, a 150 kt/a butadiene unit using the butene ODH process was completed and put on stream by Shandong Wanda Chemical Co., Ltd., a 150 kt/a butadiene unit using the C4 extraction process started production by Sichuan Petrochemical Co., Ltd., a 90 kt/a butadiene unit by Shanghai SECCO Petrochemical Co., Ltd. and a 60 kt/a butadiene unit by Fujian Refining & Petrochemical Co., Ltd. both using the C4 extraction process were completed and put on stream. By the end of December 2014, China’s butadiene capacity reached 3.823 million t/a. Table 1 shows the major butadiene producers in China in 2014.
The butadiene industry in China has following features:
(1) Supply pattern has changed. In 2014, Sinopec’s butadiene capacity accounted for 49.75% of the national total, PetroChina’s accounted for 29.19%, CNOOC’s accounted for 4.32% and private enterprises owned 16.74%. PetroChina Daqing Petrochemical Co., Ltd. is the biggest butadiene producer in China today, with 231 kt/a capacity, around 6.04% of the national total. PetroChina Jilin Petrochemical Co., Ltd. is next with 230 kt/a, or 6.02% of the total.
(2) The major production process is the C4 extraction process, supplemented by butene ODH. With trend toward lightweight raw material ethylene and the rapid growth of synthetic rubber capacity, butadiene has been in short supply in recent years with drastically increasing prices. As all domestic ethylene cracking capacity for making C4 raw material is owned by Sinopec and PetroChina, quite a few private and Chinese-foreign joint venture synthetic rubber producers seek other production processes to acquire butadiene. Production through butene ODH is therefore stimulated. In 2014, butadiene capacity employing the C4 extraction process accounted for 87.44% of the national total, and the process was used by Sinopec and PetroChina. Butadiene capacity employing the oxydehydrogenation process accounted for 12.56% of the total and was used by private enterprises in Shandong.
(3) Most butadiene producers have matched downstream units. Quite a few butadiene producers in China have matched units making downstream products butadiene rubber (BR), styrene-butadiene rubber (SBR), acrylonitrile-butadiene rubber (NBR), styrene-butadiene copolymers (SBCs) or acrylonitrile-butadiene-styrene (ABS) resin. For example, PetroChina Jilin Petrochemical Co., Ltd. has matched SBR and ABS resin units. Sinopec Qilu Petrochemical Co., Ltd. has matched SBR and BR units. PetroChina Dushanzi Petrochemical Co., Ltd. has matched SSBR and SBS units. PetroChina Fushun Petrochemical Co., Ltd. has a matched SBR unit. Shandong Zibo Qixiang Tengda Chemical Co., Ltd. has a matched BR unit. Sichuan Petrochemical Co., Ltd. has a matched BR unit. In sum, China’s butadiene production is mainly for in-house consumption.
(4) Operating rates of butadiene units are in constant decline. The average operating rate of China’s butadiene units was around 63.8% in 2014.

2. Units planned for construction or expansion

Several enterprises making downstream products of butadiene such as synthetic rubber or ABS resin in China are ready to construct or expand butadiene units during 2015-2018. Most of these units will employ the butene ODH process in production. Nevertheless, as the operating rate of some completed butadiene units using that process is low and butadiene prices are down today, some enterprises are delaying or even scrapping plans for new capacity. It is therefore expected that butadiene capacity in China will not grow much by 2018, probably increasing only by 400-500 kt/a and reaching 4.20-4.30 million t/a. Table 2 shows the butadiene units now planned to be constructed in China during 2015-2018.

Table 1    Major butadiene producers in China, 2014

Producer    Capacity (kt/a)    Process
Subtotal of Sinopec    1 902    ?
  Yangzi Petrochemical Co., Ltd.    210    DMF
  Beijing Yanshan Petrochemical Co., Ltd.    135    ACN and DMF
  Shanghai Petrochemical Co., Ltd.                                         110    DMF
  Qilu Petrochemical Co., Ltd.    164    ACN and DMF
  Maoming Petrochemical Co., Ltd.    164    DMF
  Guangzhou Petrochemical Co., Ltd.    34    DMF
  Gaoqiao Petrochemical Co., Ltd.    45    ACN
  Beijing Dongfang Petrochemical Co., Ltd.    30    NMP
  Shanghai SECCO Petrochemical Co., Ltd.    210    NMP and ACN
  Fujian Refining & Chemical Co., Ltd.    180    DMF
  Zhenhai Refining & Chemical Co., Ltd.    160    ACN
  Sinopec SABIC Tianjin Petrochemical Co., Ltd.    200    ACN
  BASF-YPC Co., Ltd.    130    NMP
  Sinopec SK (Wuhan) Petrochemical Co., Ltd.    130    ACN
Subtotal of PetroChina    1 116    ?
  Jilin Petrochemical Co., Ltd.    230    ACN
  Lanzhou Petrochemical Co., Ltd.    135    ACN
  Daqing Petrochemical Co., Ltd.    231    DMF
  Dushanzi Petrochemical Co., Ltd.    180    NMP
  Fushun Petrochemical Co., Ltd.    160    DMF and ACN
  Jinzhou Petrochemical Co., Ltd.    30    ACN
  Sichuan Petrochemical Co., Ltd.    150    ACN
CNOOC Shell (Huizhou) Petrochemical Co., Ltd.    165    NMP
BlueStar New Chemical Materials Co., Ltd. Tianjin Branch     30    NMP
Liaoning Liaoyang Jinxing Chemical Plant    30    ACN
Liaoning Huajin Tongliao Chemical Co., Ltd.    100    ACN
Shandong Zibo Qixiang Tengda Chemical Co., Ltd.    150    Butene ODH
Shandong Yuhuang Chemical (Group) Co., Ltd.    180    Butene ODH
Shandong Wanda Chemical Co., Ltd.    150    Butene ODH
Total     3 823    ?


3. Erratic import & export levels

The completion of several new BR and SBR units in the last two years boosted butadiene demand. In 2013, the import amount of butadiene jumped once again to 370.5 kt, an increase of around 7.45% over the previous year. But in 2014, due to a decline in consumption and a considerable increase of output, the import volume fell dramatically to 202.7 kt, down 45.29% from the previous year. China also exports butadiene: 12.0 kt in 2005 and the all-time high of 102.3 kt in 2010, an increase of around 149.51% over the previous year. The export volume in 2014 was only 11.7 kt, an increase of 42.68% over the previous year. The export amount during January-July 2015 was 1.4 kt, a drop of 88.29% from the same period of the previous year. Table 3 shows the import and export of butadiene in China in recent years.
Major import sources include Korea, Taiwan, the Netherlands, Brazil, Iran and Thailand. Table 4 shows the major sources for butadiene imported to China in recent years.

Table 2    Butadiene units planned for construction in China, 2015-2018

Producer    New capacity (kt/a)    Planned startup
Sinopec Guangzhou Petrochemical Co., Ltd.    120    2016
Liaoning Shengyou Rubber Technology Co., Ltd.    150    2016
Shandong Huamao New Materials Co., Ltd.    100    2015
Sinopec Baling Petrochemical Co., Ltd.    100    2017
Shanghai Huayi Acrylic Acid Co., Ltd.    70    2016
Shandong Transfer Kaiyue Chemical Co., Ltd.    100    2016
Shandong Kenli Chemical Co., Ltd.    100    2015
Shandong Dongfang Hongye Chemical Co., Ltd.    100    2016
PetroChina Jinzhou Petrochemical Co., Ltd.    100    2016
Shandong Chuangyuan Chemical Co., Ltd.    100    2016
Qingdao Soda Ash Industrial Co., Ltd.    100    2017
Inner Mongolia Jiutai Energy Co., Ltd.    100    2017
Lanzhou Huifeng Petrochemical Co., Ltd.    100    2017
Daqing Zhonglan Petrochemical Co., Ltd.    100    2016
China North Industries Group Corporation    80    2018



4. Consumption

With the rapid development of related sectors in China, such as synthetic rubber, the apparent consumption of butadiene has increased constantly. The apparent consumption was 1.13 million tons in 2005; 2.10 million tons in 2010, up 16.45% over the previous year; and 2.63 million tons in 2014, up 0.75% over the previous year. Figure 1 shows China’s supply and demand for butadiene in recent years.
In China, butadiene is used mainly to produce synthetic rubbers, SBCs and ABS resin. In 2014, around 32.0% was used for making BR, 28.1% for SBR, 18.5% for SBCs, 15.2% for ABS resin and 4.2% for NBR.

Table 3    Import & export of butadiene in China, 2007-2014

Year    Import amount (kt)    Export amount (kt)
2007    111.2    24.7
2008    142.5    35.8
2009    297.7    40.9
2010    215.7    102.3
2011    183.0    74.6
2012    344.8    39.5
2013    370.5    8.2
2014    202.7    11.7


Table 4   Major sources for butadiene imported to China, 2011-2014  (kt)

Import source    2011    2012    2013    2014
Korea    56.2    127.9    141.0    88.0
Japan    5.0    13.1    9.5    6.9
Taiwan    61.2    38.5    35.3    31.8
USA    0.2    6.1    11.9    0.0
Netherlands    22.9    50.9    48.9    0.9
Brazil    3.1    13.4    20.1    6.7
Iran    10.2    24.0    20.7    28.3
Singapore    4.2    16.1    5.5    6.9
Malaysia    7.1    7.5    10.5    3.7
Belgium    0.0    21.8    7.0    1.9
Thailand    0.0    14.0    25.5    11.2
Saudi Arabia    1.5    0.0    5.2    0.0
Indonesia    0.0    0.0    4.1    7.3
India    0.0    5.7    4.0    6.4
France    2.0    0.0    0.9    2.5
Others    9.4    5.8    20.4    0.2
Total    183.0    344.8    370.5    202.7



Due to slow recovery of the global economy, the European debt crisis and the slowdown of growth in China’s tire production and sales, the growth of synthetic rubber demand has been slow in recent years. Capacity expansion far outpaces the growth of market demand. Domestic capacity to make the major synthetic rubber varieties such as SBR, BR and SBCs is in surplus by different degrees. Operating rates of synthetic rubber units have been reduced, and the growth of butadiene demand has consequently slowed down.
It is expected that the demand for butadiene in China will be around 3.10 million tons in 2018. The capacity to make it will however be around 4.20 million t/a at that time. Judging from the operation of butadiene units today, China will still need some imported butadiene to bridge the gap in the next few years. The manufacturers of SBR and BR will remain the most important consumers of butadiene in the next few years, and NBR will be the variety with the most rapidly growing consumption.