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  • IHS CEH Report : 1,4-Butanediol (Chemical Economics Handbook 2019)

Download Report IHS CEH Report : 1,4-Butanediol (Chemical Economics Handbook 2019)

PDF by S&P Global Commodity Insights; IHS Markit
Information
Format: PDF Language: English Pages: 73 Publisher: S&P Global Commodity Insights; IHS Markit Publitshion date: 2019 ISBN: 114106
Description
1,4-Butanediol (BDO) is a bifunctional, primary alcohol that is produced by a variety of methods, mainly from petrochemicals. The major uses are in the production of tetrahydrofuran (THF) (an intermediate of spandex and other performance polymer products) and polybutylene terephthalate (PBT) resins for engineering plastics. It is also used in the manufacture of gamma-butyrolactone and polyurethane elastomers. China continues to be the world's largest producer and consumer of BDO, and has added majority of new capacity; however, the capacity increases have led to overcapacity and lower market prices for BDO. The BDO industry has attracted significant investment in the development of biosuccinic acid and the production of bio-BDO from sustainable sources. Although the first-generation industrial-scale bio-based plant is now in operation, several other projects have been cancelled following financial issues within the companies or shifts in focus from production to research and development.1,4-Butanediol (BDO) is produced by a variety of methods, mainly from petrochemicals, and is used in the production of tetrahydrofuran (THF), polybutylene terephthalate (PBT), γ-butyrolactone (GBL), polyurethane (PU), and other chemicals. THF is used primarily for polytetramethylene ether glycol (PTMEG), which is converted primarily to spandex fibers; THF is also used as a solvent. PBT is used as engineering plastic. Therefore, the end products of BDO can be said to be plastics (PBT, PU), fibers (spandex), and solvents (THF, GBL). New technologies using biochemical processes have been used for bio-BDO production, but prospects for bio-BDO have toned down compared with several years ago, and commercial production remains small. Global BDO capacity grew about 15% during 2015–18 with a large majority of these additions being based in China. The overcapacity of the BDO has eased slightly compared to three years ago, but the capacity utilization rate in 2018 remains low at around 62%. The global BDO market is estimated at nearly 2.4 million metric tons in 2018 including captive consumption. THF is the primary derivative of BDO, accounting for about 55% of BDO consumption, followed by PBT at about 22% in 2018. Overall, global BDO consumption is expected to grow at average rate of around 3.4% annually over the forecast period. The pricing trends for BDO basically follow raw material prices, such as for propylene, butadiene, n-butane, or maleic anhydride, which in turn are related to feedstock costs for crude oil, natural gas, or coal. The supply/demand balance also naturally plays a role in pricing. In addition, prices set in China, the major producer and consumer of BDO, can affect prices in other regions/countries. Yearly average BDO prices in 2017–18 were higher than in 2015–16 because the prices of the raw materials have increased. Global BDO consumption is concentrated in China, Other Asia, the United States, and Western Europe, which accounted for 52%, 21%, 12%, and 10%, respectively, of total consumption of BDO in 2018. In China, BDO consumption has increased dramatically with rapid growth of spandex, PBT, and GBL production; these markets will continue to expand over the next few years. Chinese BDO consumption increased by 45% between 2015 and 2018, while capacity increased by 30% in the same period. As a result, the average operating rate in Chinese BDO plants was improved to 60% in 2018 from 51% in 2015, although this is still low by industry standards. In Japan and Other Asia, BDO is used primarily for THF and PBT production. Taiwan, Japan, South Korea, and Malaysia are the major producers and consumers in this region. Consumption in India and other Southeast Asian countries is negligible. As BDO demand in this region has already matured, and China has increased capacity for BDO and its derivatives, consumption is not expected to increase much over the next five years. In the United States, approximately 65–80% of BDO output is used for captive demand. All producers are forward integrated into THF and/or GBL and its derivatives and take great effort in balancing their own requirements with fluctuating market demand. BDO is used mainly for THF and GBL production, accounting for about 48% and 31%, respectively, of US BDO consumption in 2018. As the market is already mature, BDO consumption in the United States is expected to grow at only about 1.4% per year on average through 2023. In Western Europe, BDO consumption has been stable in the last five years. THF and PBT are the main products derived from BDO, accounting for 42% and 26% of the total BDO consumption, respectively, in 2018. As BDO consumption in this region is mature, it is expected to grow at less than 1% per year through 2023.
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