Heavy olefins
Overview
Global butadiene production and demand are dominated by northeast Asia. Although the region continues to add both supply and derivative projects, there have been market inefficiencies that have resulted in deep sea imports into the region. Accurate and timely analysis will help producers, consumers and traders navigate these turbulent times.
The C5 and hydrocarbon resins industry has experienced a fundamental shift in the past few years, going from several acute shortages to a glut of products in the markets. Producers, industrial chemicals companies, chemical distributors, traders and technology providers all need to understand how this will play out, especially in light of new entries into the global market. Argus’ C5 and Hydrocarbon Resins Service is the only global service of its kind.
Our experts will help you determine what trends to track and how to stay competitive in today’s ever-changing global markets.
Latest heavy olefins news
Browse the latest market moving news on the global heavy olefins industry.
Japan petchem producers urged to turn to ethane
Japan petchem producers urged to turn to ethane
Declining exports and demand signal that Japan's petchem sector is lagging behind its competitors, writes Nanami Oki Tokyo, 5 March (Argus) — Japan's petrochemical producers should convert their ethylene steam crackers to low-cost ethane rather than naphtha and LPG and should do so now before the challenges become impossible, refinery integration research association Ring says. Japan has a total cracking capacity of around 6.8mn t/yr, most of which is naphtha-fed with about 6.2mn t/yr of this coming with the flexibility to crack some degree of LPG, Argus data show (see table). Operators should turn to cheaper ethane imported from the US, Ring says, adding that it is concerned Japan's petrochemical sector is falling behind international competitors such as China , South Korea and Vietnam in a burgeoning feedstock transition to ethane. The country's petrochemical sector is already struggling from declining exports and domestic demand, pressured by regional oversupply driven by China. This has prompted Japanese firms to cut production of ethylene and other petrochemicals while focusing more on high-performance goods. But overseas competitors will catch up with Japanese technologies to generate these value-added products, so it is crucial to secure cheaper feedstock in the long term, Ring says. Switching to ethane-fed crackers could help domestic firms retain their competitiveness, with potential cost reductions of up to $400/t of ethylene output, Ring estimates. But the industry faces headwinds if it is to transition, the association says. One issue is that the companies do not have requisite funds for large-scale investments in switching to ethane that the associated infrastructure requires as a result of stagnant growth. Japanese producers with crackers — Mitsui Chemicals, Sumitomo Chemical, Mitsubishi Chemical, Tosoh and Resonac — have all posted lower profits from their basic petrochemicals divisions on shrinking margins in the past five years. The transition also requires infrastructure including storage facilities and ethane barges and ships to enable imports from the US, adding significant costs. Japanese firms are unlikely to have adequate infrastructure, let alone funding, to invest in such capacity and some, along with the country's authorities, have begun exploring converting existing facilities to alternative fuels such as hydrogen and ammonia to capitalise on anticipated growth in renewable fuels. Ring and Japan's economy, trade and industry ministry (Meti) have also expressed concern that a switch to ethane for cracking could create shortages in supplies of other basic petrochemicals other than ethylene because ethane feedstock yields mainly ethylene. Japanese companies have attempted to develop butadiene production from alternative feedstocks such as bioethanol and recycled oils for decarbonisation. But such technologies are at the early stages of development and their profitability remains hamstrung by high costs. Ring the changes Developing new propane dehydrogenation plants could help Japan prevent propylene shortfalls, but this is unlikely to be feasible given the levels of investment and acreage required at existing petrochemical complexes. The country's petrochemical producers could convert a proportion of their individual crackers to be fed with ethane in a flexible set-up instead of replacing the unit. Japanese crackers have many different components varying in age that will be difficult to replace under an ethane-only system, Ring says. It would also be preferable to diversify feedstocks for supply security, it says. Japan's ethylene production fell by 2.4pc on the year to 4.99mn t in 2024, the JPCA says, the lowest since its records began in 1999. Average cracker operating rates stood at 79.9pc last year, down by 0.9 percentage points from 2023, falling below 80pc for the first time since 2014 — when the first JPCA data on utilisation were available. Japan's petrochemical sector use of LPG fell by 13pc on the year to 1.39mn t in 2024, data from the Japan LPG Association show. NE Asia cracker cash margins Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Eni plans to close Brindisi cracker by end April
Eni plans to close Brindisi cracker by end April
Milan, 15 January (Argus) — Italy's Eni is planning to close its steam cracking capacity in Brindisi by the end of April despite calls for a rethink, trade union Filctem Cgil said. "The company said it intends to close the cracker within the first four months of the year," Filctem Cgil national secretary Antonio Pepe told Argus . The timeline emerged last week at a meeting between the trade unions, government and Eni at the industry ministry in Rome called to discuss the next steps for the Brindisi plant. It followed an earlier meeting in December on Eni's plans to shut its cracking capacity at Priolo in Sicily and end polyethylene production at its 160,000t/yr site in Ragusa. At that meeting Eni said it intended to close the Priolo cracker by the end of this year and start of 2026. "There will now be a final meeting at the end of this month to pull together the threads of the two meetings and take decisions," Pepe said. Eni, which is more than 30pc state owned, is looking to significantly cut the exposure of its chemicals business Versalis to basic chemicals, a sector that it sees is facing structural and irreversible decline in Europe. Last October, it unveiled a €2bn ($2.06bn) euro restructuring plan to close basic chemical plants and invest in innovative platforms over the next five years. The plans include building a new biorefinery at the Priolo site at a cost of around €800-900mn. Eni has previously said the Brindisi and Priolo crackers will be shut down within 12-18 months . The nameplate ethylene capacity at Brindisi is 410,000 t/yr and propylene capacity is 220,000 t/yr. The Priolo site has nameplate capacities of 430,000 t/yr ethylene, 250,000 t/yr propylene, and 790,000 t/yr aromatics. Filctem CGIL has called on Rome to reject Eni's plans to close cracking operations at Brindisi and Priolo, claiming it would put 20,000 jobs at risk and deal a death blow to Italy's chemicals industry. By Stephen Jewkes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Viewpoint: European BD to face tighter supply in 2025
Viewpoint: European BD to face tighter supply in 2025
Houston, 30 December (Argus) — European butadiene (BD) supply is expected to tighten next year, according to market participants, because of scheduled steam-cracker closures and steady demand. European domestic demand this year helped spot prices maintain a 5-7pc premium to the monthly contract price (MCP) until December, when spot prices fell to parity with the MCP. But the lower BD MCP in December protected Europe's position as the lowest cost region after three consecutive price rollovers, even as US and Asian prices fell. Market sentiment is cautiously optimistic on consumer demand for early 2025. One producer noted that interest for spot volumes remains strong into early next year and export sales should remain resilient, especially once buying interest picks up after the Lunar New Year. European BD exports — which primarily flow to the Asia-Pacific region with one-offs to the US— were stable at nearly one shipment per month from April-December, although they were down from the prior year. Europe's BD exports totaled about 109,700 metric tonnes (t) so far this year, but there are ongoing discussions for one additional long-haul shipment loading in late December. That said, the spread between Europe and the US is forecast to remain closer to parity, narrowing the premium European sellers have obtained from moving shipments eastward. Both planned and unplanned cracker turnarounds in the US may raise prices there and open space for Europe's coastal producers to periodically capture preferred access to Asian buyers, independent of logistical bottlenecks. Currency, crackers may pressure demand Currency fluctuations may dent buyers' confidence in the coming year as a stronger US dollar lifts costs for imports, affecting selling prices of European-origin exports in dollar terms. The outcome of the US presidential election rallied the dollar against the euro and other currencies, as markets price in expected tariffs from the new US administration. The comparative strength of the US economy also drove the rally. Strong European domestic demand could undercut potential BD exports as the region's supplies gradually transition from net-long to more balanced, with ongoing structural changes transforming Europe's chemical business. The closure this year of two steam crackers in France and the Netherlands along with the planned shut down of two more crackers in Italy will reduce regional supply of crude C4, a key BD feedstock. Buyers in Italy will need to rely more heavily on Mediterranean imports of crude C4 in tandem with BD to maintain derivative operations. Cracker operators next year are likely to keep throughput curbed while running lighter feedslates, limiting availability of additional volumes of crude C4 and BD. Rail logistical constraints will linger into 2025 with at least three BD consumers depending more on this mode of transportation. The European market could see additional restructuring next year, with at least one producer weighing a review of its asset portfolio. Market participants also are watchful for announcements of unexpected closures. BD producers in the region are also concerned about price volatility for natural gas, citing weaker margins. Dutch TTF on a day-ahead basis averaged €44.66/MWh month-to-date in December, rising by 27pc from the same period a year earlier at €35.24/MWh. Dutch TTF on a day-ahead basis reached a year-to-date peak on 21 November at €48.58/MWh. Higher natural gas prices are partially due to continued complications in gas transport and supply and to accelerated storage withdrawals. By Joshua Himelfarb Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Viewpoint: US BD demand awaits 1Q rebound as risks loom
Viewpoint: US BD demand awaits 1Q rebound as risks loom
Houston, 24 December (Argus) — US demand for butadiene (BD) is expected to increase in January, but buyer sentiment for the remainder of the first quarter remains uncertain. Inventory restocking in January is expected to draw down excess supply and provide near-term price support, according to market participants. Derivative manufacturers aim to rebuild inventories following earlier-than-normal destocking initiatives this year. Many buyers employ standard inventory control management strategies to avoid paying higher end-of-year inventory taxes, particularly in Texas. Others cut costs to improve year-end financial statements. Domestic demand in February and March is less clear, as market participants question whether the market will rebound from persistently low demand at the end of 2024. US BD prices on a contract basis fell by 12pc during the fourth quarter , owing to weak demand and oversupply. Demand was depressed by BD consumer turnarounds in October, seasonal slowdowns between November-December and trade pressures tied to derivative imports. US tire shipments this year are expected to rise by 2.1pc to 338.9mn units, surpassing the record set in 2021, according to the US Tire Manufacturers Association. However, market participants along with US trade data reference a jump in tire imports from Asia-Pacific. Both Bridgestone and Goodyear have said low-cost tire imports and structural changes in segment profitability across the Americas are eroding their market share, fueling capacity rationalization, asset sell-offs and plant closures in the region. Acrylonitrile butadiene styrene (ABS) is another segment at risk of stronger competition from low-cost, Asia-origin imports. Ineos Styrolution plans to permanently shut down its ABS plant in Addyston, Ohio, in 2025 because the facility cannot compete with imported material. "Over the past few years, we have seen the ABS market become increasingly competitive, particularly with growing competition from overseas imports," Ineos Styrolution chief executive Steve Harrington said in late October. Protectionist trade policies are likely to be a feature of president-elect Donald Trump's second administration, potentially altering business investment decisions and durable goods trade flows. Even if demand does not improve, planned maintenance in the first half of 2025 is expected to tighten BD supplies. A heavy turnaround cycle for steam crackers will concentrate in the first and second quarters, constraining availability of feedstock crude C4. One integrated US Gulf coast producer plans to enforce BD allocations while its assets are offline for planned maintenance. A separate, non-integrated producer has not announced BD sales controls, based on feedback from its customers. This same BD supplier was short on feedstock supplies for parts of this year, with the crude C4 merchant market illiquid in North America. A third producer has scheduled a cracker turnaround starting in January, but no indications emerged that would limit term volumes from its BD unit. Reduced BD supply during cracker maintenance is likely to pull volumes away from the export market until the second half of 2025. Export spot cargoes in the fourth quarter more than doubled from the third quarter, serving as a critical outlet to clear the domestic market of surplus BD supplies, even as lower export prices pressured US margins. By Joshua Himelfarb Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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