CHEM SYSTEMS PREDICTS SURPLUS OF BUTADIENE ON WORLD MARKETS

About 2 million metric tons/year of surplus butadiene will be available to world buyers by the end of the 1990s.

The butadiene will be a coproduct from ethylene crackers, says Chem Systems Ltd., London.

The glut will arise because butadiene demand will increase only 3%/year to 2000, lagging ethylene's demand growth rate of 4.517,,/year.

Chem Systems says 500,000 metric tons/year of added capacity for full or selective hydrogenation of butadiene to produce, respectively, butanes and butylenes will be needed by 2000 to work off this excess.

None of the disposal alternatives - cocracking, fuel use, or full hydrogenation - offers as high a netback as selective hydrogenation - offers as high a netback as selective hydrogenation.

Of the alternatives, full hydrogenation carries the lowest netback. But it's useful where there are no downstream methyl tertiary butyl ether (MTBE) operations - in South Korea, Japan, and Australia, for example.

Selective hydrogenation is practiced almost exclusively in western Europe, where there are MTBE units to absorb unconverted isobutylene.

By 2000, says Chem Systems, there will be a change in the favored disposal method. Hydrogenation will predominate, accounting for 1.3 million tons of contained butadiene, but cocracking still will be used to eat up short term surpluses.

World butadiene hydrogenation capacity was an estimated 720,000 metric tons/year in 1993.

Further investments will be required in Europe, the Middle East, and Asia and possibly in Latin America and eastern Europe, Chem Systems predicts.

By 2000, combined full and selective hydrogenation capacity will double to almost 1.3 million tons/year. With world MTBE demand predicted to grow an average 15%/year to 2000, growth in selective hydrogenation will outstrip that of full Hydrogenation.

Chem Systems predicts trade in finished butadiene will decrease sharply between 1995 and 2000 if all he planned ethylene projects materialize. As more butadiene becomes available in traditional importing countries, opportunities for butadiene trade will diminish, and exporters - including South Korea and newcomer Saudi Arabia - will face an increasingly competitive market.

Operations not equipped with C4 hydrogenation units will be forced to take the less desirable option of recycling more C4S instead of extracting butadiene for sale.

Another alternative for butadiene has been proposed by researchers from Dow Chemical in Midland, Mich.

At the spring national meeting of the American Institute of Chemical engineers in Atlanta, Dow engineers Ravi S. Dixit and Craig B. Murchison disclosed a new process for converting crude C4 streams to styrene. Conventional styrene production processed convert ethylbenzene.