A severe tightness in global butadiene markets has drawn considerable attention to the C4 value chain and its prospects for future development. Structural changes in global olefin feedstock selection, supply additions and plant production utilization have resulted in both shortages and unpredictability in mixed C4 supply. In addition, record highs in natural rubber prices have supported higher demand for synthetic rubbers as well as butadiene in 2011. With a tightening mixed C4 feedstock supply and consistent derivative demand, the price of butadiene has increased dramatically culminating in record highs in 2011.
Furthermore, pricing has becoming extremely volatile with large fluctuations in price spreads occurring over relatively short time frames. The current and evolving landscape remains highly unpredictable due to the complex nature of the C4 value chain. A key issue facing the industry today is tied to availability and production of mixed C4 from steam crackers. The global landscape for olefins production is in a state of transition, characterised by changing in feedstock slates in different regions. Co-production of mixed C4, and available butadiene, is becoming increasingly difficult to forecast, and ultimately contributing to erratic pricing levels.