In recent expert analysis, it was noted that although China's butadiene supply remains limited, the market has gradually moved toward a more balanced state between supply and demand. Over the past year, the global butadiene market has shown a clear upward trend. In the last week of February, prices in China, South Korea, and Southeast Asia rose by 30 to 40 USD/ton compared to the previous week. Some buyers have even been willing to pay over 1,200 USD/ton, up from around 900 USD/ton at the end of last year. This price increase is primarily due to supply constraints as five major butadiene units in South Korea and Japan are scheduled for maintenance from April to May this year. Additionally, strong demand from downstream users in China, especially in the synthetic rubber industry, has further driven up prices. Butadiene is a by-product of ethylene production through steam cracking, mainly used in the manufacturing of synthetic rubbers and resins. Key products like butadiene rubber, styrene-butadiene rubber (SBR), and SBS elastomers all rely heavily on butadiene as a primary raw material. In China, about 84% of butadiene is consumed in the production of synthetic rubber. As a result, butadiene prices are closely tied to the performance of the synthetic rubber market. The automotive industry is the largest consumer of synthetic rubber, and with China’s rapid growth in car production—reaching 5.708 million units in 2023, a 12.6% increase from the previous year—demand for synthetic rubber has surged. Moreover, industries such as hose and tape manufacturing also require significant amounts of synthetic rubber. With continued infrastructure development, including projects like the Three Gorges Dam, the South-North Water Diversion Project, and the Qinghai-Tibet Railway, the demand for synthetic rubber is expected to remain strong. In 1995, China's apparent butadiene consumption was only 410,000 tons, rising to 1.06 million tons in 2004. By 2024, it is projected to reach 1.17 million tons, with an estimated 1.44 million tons by 2010. However, domestic production has historically lagged behind demand, leading to large import volumes. By the end of 2004, China had 19 butadiene production facilities with a total annual capacity of 1.02 million tons, but actual output was only 870,000 tons, with imports reaching 190,000 tons—an increase of 44% from the previous year, accounting for 18% of total consumption. This year, however, the butadiene market is entering a critical turning point. Internationally, many regions are experiencing overcapacity, leading to a downturn in the butadiene industry. China, with its growing market and favorable economic conditions, is becoming an attractive target for international players, which could impact domestic supply and demand dynamics. On the domestic front, China's butadiene production capacity is set to grow rapidly due to technological upgrades in existing ethylene plants and the completion of several large Sino-foreign joint ventures. Projects such as the Nanjing Yangba Integration and Shanghai SECCO have each added 90,000 tons of butadiene production capacity. The Guangdong Zhonghai Shell project, launched earlier this year, increased capacity by 120,000 tons. Other companies, including Bluestar Chemical and Zhenhai Lian Chemicals, are also expanding their butadiene facilities. As a result, China's butadiene production capacity is expected to reach 1.37 million tons this year, potentially meeting domestic demand. By 2010, it is forecasted to reach 1.51 million tons, possibly leading to oversupply. Despite these developments, the domestic butadiene industry is looking ahead with strategic vision. Rather than focusing solely on quantity, companies must now prioritize quality improvements. This includes reducing energy and material consumption through facility upgrades, investing in new technologies, exploring alternative raw materials, and enhancing automation. These efforts aim to elevate China’s butadiene production technology to a higher level, ensuring competitiveness in an increasingly challenging market.

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