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TPC explosion likely to have limited impact on US butadiene market

December 02/2019

MOSCOW (MRC) -- The explosion at TPC Groups Port Neches, Texas, butadiene facility Wednesday morning takes a large share of US butadiene extraction capacity out action, but the effect on downstream derivative markets should be limited, owing to the availability of spare capacity, says Bill Hyde, reported Chemweek with reference to senior director/olefins and elastomers at IHS Markit.

"The US butadiene producers have not been running at maximum operating rates," says Hyde. "As a result, the loss of 17% of the capacity will not cause the same heartache in the industry as it might in another market."

The butadiene market is typically feedstock-limited, and TPC itself does not produce crude C4, the feedstock for butadiene extraction, Hyde notes. "So the question facing the industry is whether or not there is enough spare capacity and logistical flexibility to get the crude C4 that would have gone to Port Neches to another butadiene extraction unit," he says. "I think the answer to that is likely to be yes. If not, only a fairly small amount of crude C4 will not find a home. This means that for the butadiene derivative producers, this is not as significant an event as it might otherwise seem."

Downstream products include polybutadiene rubber (PBR, 29% of US butadiene demand); adiponitrile, a key nylon-6,6 feedstock (24%); styrene-butadiene rubber (SBR, 21%); styrene-butadiene latex (SB latex, 8%); and acrylonitrile-butadiene-styrene (ABS, 3%).

All 11 US butadiene extraction units are located on the US Gulf Coast (USGC). TPCs 426,000-metric tons/year unit at Port Neches, Texas, accounts for 17% of the 2.47 million metric tons/year of butadiene capacity in the US, according to data from IHS Markit. The company also has a 417,000-metric tons/year unit at Houston, Texas.

There are five other producers operating nine butadiene extraction units on the USGC: Shell (411,000 metric tons/year), LyondellBasell (388,000 metric tons/year), ExxonMobil (411,000 metric tons/year), and Ineos (98,000 metric tons/year).

Most butadiene consumers in the US do not have their own butadiene extraction units in the region.

The largest consumer is Invista, which produces adiponitrile at Orange, and Victoria, Texas, for a total of 484,000 metric tons/year of consumption capacity, according to data from IHS Markit. Goodyears PBR and other derivative units at Beaumont, Texas, have capacity to consume 337,000 metric tons/year.

Arlanxeo has capacity to consume 244,000 metric tons of butadiene at sites in Orange and Houston, Texas, mainly in the production of PBR, but also solution SBR, nitrile rubber, and other products. Lion Elastomers, which produces PBR at Orange, has capacity to consume 153,000 metric tons/year.

Other major consumers include Bridgestone, at Lake Charles, Louisiana; Kraton Polymers, at Belpre, Ohio; and Trinseo, at Midland, Texas, and Dalton, Georgia. Almost 30 more US derivative producers have capacity to consume 1,00043,000 metric tons/year of butadiene, putting total US consumption capacity at 2.03 million metric tons/year.

According to ICIS-MRC Price report, in Asia, the falling prices of feedstocks for ABS production have been pushing prices of material down in the Russian market. LG Chem's import prices for November quantities were as follows for Russian buyers: natural ABS - at USD1,400-1,420/tonne FOB Korea, black ABS - at USD1,610-1,630/tonne FOB Korea, white ABS - at USD1,640-1,660/tonne FOB Korea. December prices may drop by another USD30-50/tonn.
Natural grades of Korean ABS went down to Rb138,000-143,000/tonne CPT Moscow, including VAT, in the domestic market in mid-November, whereas black ABS was offered at Rb156,000-160,000/tonne and white ABS - at Rb158,000-163,000/tonne CPT Moscow , including VAT.

Headquartered in Houston, TPC was acquired in 2012 by private equity groups First Reserve and SK Capital.
Author:Margaret Volkova
Tags:PS, ABS, butadien, Arlanxeo (Lanxess), Exxon Mobil, Ineos, LG Chem, LyondellBasell, Shell, TPC Group, Russia, USA.
Category:General News
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