By Wang Yuying, Liu Jin and Wang Liquan

China’s high purity isobutylene capacity is mainly located in Shandong. To effectively use C4 amid the rapid development of the petrochemical industry, a large number of dehydrogenation of isobutane to isobutylene units were built and started up since 2012. Focus shall be put on the integrated development of upstream and downstream industries and extend the industrial chain alongside the continuous improvement of production process to enhance the units’ anti-risk abilities. 

Current Situation of China’s High Purity Isobutylene Production

There were two new high purity isobutylene units in China in 2020. They are Shandong Qixiang Tengda’s 50 kt/a unit and Shandong Shengrong Chemical (affiliated to Shandong Yuhuang Chemical Group)’s 60 kt/a unit. By the end of 2020, domestic high purity isobutylene capacity reached 1 082 kt/a. Main production processes include MTBE cracking, isobutane dehydrogenation and tert-butanol dehydration, respectively accounting for 76.2%, 13.9% and 9.9% of total domestic capacity. Shandong is the major high purity isobutylene producing province in China, with 18 such kind of producers and having a combined 648 kt/a capacities, which covers 59.9% of domestic total. Major Chinese high purity isobutylene producers are shown in Table 1.

     In 2020, seven high purity isobutylene plants at Dongying Sitong, Binzhou Shundong, Lushenfa Chemical, Dongying Qifa, Luoyang Hongli, Yueyang Xingchang and Binzhou Yuhua, with their idled capacity totalling 213 kt/a. Capacities for captive use and contract customers were around 306 kt/a and 468 kt/a were available for sales. 

Zhejiang Cenway kicked off the 250 kt/a IIR reconstruction and expansion project, which is equipped with a 750 kt/a tert-butanol derivatives comprehensive utilization project. The equipped project is expected to be completed by the end of 2021 and will provide high purity isobutylene to IIR unit. 

Isobutane supply is increasing with the rapid development of the domestic petrochemical industry. To effectively use C4 resource, many isobutane dehydrogenation for isobutylene units have been completed and started up since 2012. Most isobutane dehydrogenation units produce industrial grade isobutylene, which is a major feedstock for MTBE and can obtain high purity isobutylene after further purification. By the end of 2020, isobutane dehydrogenation units in China had a combined capacity of around 5 185 kt/a, with effective capacity concentrated in Shandong. High feedstock C4 costs, especially isobutane prices incurred severe losses on isobutane dehydrogenation units. Some of them were forced down. Weak margins are likely to cause delay in plans for new isobutane dehydrogenation projects. 

Three Major Downstream Industries Drive Consumption

China’s high purity isobutylene is mainly used to produce MMA, IIR, polyisobutylene, antioxidants and pharmaceutical intermediates. In 2020, domestic consumption of high purity isobutylene stood at 593 kt, up by 115 kt from 2019. Of these, 42% was used in MMA production, 41.8% in IIR production, 14% for polyisobutylene producing and 2.2% for others. The increase in domestic high purity isobutylene consumption in 2020 was mainly attributed to elevated output of MMA and IIR. 

MMA: Domestic isobutylene-based MMA capacity is on the rise in recent years, increasing from 340 kt/a in 2019 to 440 kt/a in 2020. The capacity proportion also climbed from 26.5% in 2019 to 29.8% in 2020. Average domestic MMA plants’ run rate was around 62%, which was estimated to contribute to 249 kt of isobutylene consumption in 2020, up from 199 kt from 2019. Two new isobutylene-based MMA units are expected to start up in 2021. They are Dongming Huayi Yuhuang New Material’s 50 kt/a unit and Zibo Qixiang Tengda’s 100 kt/a unit. 

IIR: Domestic IIR capacity totalled 435 kt/a in 2020, with output at 219 kt, up by 55 kt from 2019. Its isobutylene consumption increased from 185 kt in 2019 to 248 kt (one ton of IIR consumes 1.131 tons of isobutylene) in 2020. Overseas orders recovered with domestic economic recovery in 2021 and domestic tyre producers raised their operating rates. Rising downstream demand and IIR capacity will continue to boost demand for high purity isobutylene. 

Polyisobutylene: There were no new polyisobutylene units in China in 2020. Domestic capacity totalled around 169 kt/a, and output was around 702 kt, with demand for polyisobutylene at around 83 kt (one ton of polyisobuylene consumes 1.181 tons of isobutylene). With the continuous strengthening of domestic environmental protection requirements and the continuous upgrading of oil quality, emission restrictions have become more and more stringent. As a good oil modifier, oil products producers may be required to add polyisobutenamine, a downstream product of polyisobutylene. Therefore, the demand for high-activity polyisobutylene will increase in the future.

In addition, high purity isobutylene is used to produce tert-butylphenol products, tert-butylamine, tert-butyl mercaptan, isobutyl aluminum, pivalic acid and methallyl chloride, etc. Their consumption of high purity isobutylene was relatively stable in 2020, at around 13 kt. 

Import and Export Analysis and Forecast

China’s isobutylene imports and exports in 2013-2020 are shown in Table 3, which reflects limited import volume in 2018-2020. China Taiwan was the major import origin in 2020. China’s exports of isobutylene decreased by around 10 kt in 2020, with South Korea, Singapore and China Hong Kong being major export destinations. With domestic supply increasing in the coming years, China may import isobutylene occasionally, but the import volume will remain relatively limited. 

     Industry Development Suggestions 

The first is to carry out standard matching with advanced domestic units. On this basis, complete the formula upgrade and production process optimization, realize quality improvement, and improve the overall economic operation level of isobutylene plants. While continuously improving the production process of existing units, we shall pay attention to the development and application of new technologies and new processes of similar units at home and abroad, and make technical reserves for the future development of our own units.

The second is domestic isobutylene units generally reach capacity of above 20 kt/a. To enhance their strength in market competitions, focus shall be put on integrated upstream and downstream development, extend the industry chain and strengthen units’ anti-risk abilities.  

     The third is to grasp market dynamics and rationally adjust business strategies. Track market dynamics in a timely manner and grasp market information accurately and timely to provide basis for adjusting production and business strategies.