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Contact: Debbie Rhoden

281-531-4660
January, 2000
f0f lMM00l8l0 f0l0880.
CMAI - Asia
140C Neil Road
088869 Singapore
Singapore
Tel: (65) 226-5363
Fax: (65) 226-5157
CMAI - USA
11757 Katy Freeway
Suite 750
Houston, Texas 77079
United States
Tel: (281) 531-4660
Fax: (281) 531-9966
CMAI - Europe
4th Floor, 14-16
Waterloo Place
London SW1Y4AR
United Kingdom
Tel: (44 171) 930-9818
Fax: (44 171) 930-9819
CMAI - Latin America
2655 Le Jeune Road
Gables Intl Plaza, Suite 918
Coral Gables, FL 33134
United States
Tel: (305) 663-5720
Fax: (305) 663-5719
CMAI has just completed the
2000 World Butadiene Analysis.
Butadiene demand is concentrated in
its use in the manufacture of synthetic
rubbers (chloroprene rubber, nitrile
rubber, polybutadiene rubber and sty-
rene-butadiene rubber) since 64.0
percent of the total demand for buta-
diene will be consumed by these de-
rivatives in 1999. Demand for buta-
diene in the production of ABS resins
and adiponitrile (for the production of
nylon 6,6) are expected to see the
highest average annual rate of growth
for all derivatives during the period
from 1998-2004. This will depend
some what upon the timely startup of
new ABS capacity that is planned in
China. Polybutadiene and SBR will lead all derivatives in the increase in total tons of butadiene consumed.
Demand for butadiene in these applications will increase by more than 800,000 tons during the period. The
analysis finds that global demand for
butadiene will increase at a an aver-
age annual rate of 3.9 percent during
the period from 1998 to 2004. This
is a rate that is 10 percent lower than
the compounded annual rate of 4.3
percent from 1994 to 1998.
The world has been subdivided
into ten major regions that are impor-
tant to world trade in butadiene and
its derivatives. Regions with the fast-
est demand growth are Southeast Asia
ABS
9%
ADN
7%
CPR
2%
NBR
3%
PBR
28%
SBL
11%
SBR
31%
OTH
9%
WORLD
Total Consumption = 7683 Thousand Metric Tons
1999 BUTADIENE DEMAND

World Butadiene Demand by Derivative

(-000- Metric Tons)
FORECAST 1998-04
1998 1999 2000 2001 2002 2003 2004 %AAGR
Demand
ABS Resins 649 694 722 756 795 833 866 4.9
Adiponitrile 512 534 555 587 637 654 671 4.6
Polychloroprene Rubber 159 153 155 156 152 153 154 -0.5
Nitrile Rubber 248 254 263 271 276 287 297 3.1
Polybutadiene 2066 2117 2216 2303 2408 2485 2570 3.7
S.B. Latex 853 872 902 943 985 1025 1063 3.7
S.B. Rubber 2265 2359 2438 2540 2615 2688 2758 3.3
Others 651 700 769 810 853 888 918 5.9
Total World 7403 7683 8020 8366 8721 9013 9297 3.9
PCR/NBR/OTH 1058 1107 1187 1237 1281 1328 1369 4.4
and the India Subcontinent. Demand in the Former Soviet Union is expected to remain at a similar rate of
growth to that experienced from 1994 to 1998. Lower rates of demand growth are forecast for most regions
except South America and West Europe compared to the historic period. Africa will remain the smallest
consuming region for butadiene in the world, and Northeast Asia is forecast to become the largest consuming
region for refined butadiene in the world when it passes North America in 2000.
New butadiene producing capacity is being added at an annualized rate of 2.5 percent. More than
410,000 tons of new capacity will come on line in Northeast and Southeast Asia (China, Taiwan, and Indone-
sia), and since local demand will not consume all of the butadiene that can be produced, both regions will
become exporters to the word (primarily North America). Globally, demand is forecast to outpace the rate of
capacity additions, and this will push butadiene plant operating rates to over 87.0 percent of their designed
capacity by the end of the period. This compares to a operating rate of 80.4 percent in 1999.
The global butadiene balance shows that extraction unit operations will remain below 87.0 percent until
late in the period. However, this is misleading since 13.0 percent of the worlds extraction capacity is located
in East Europe and the Former Soviet Union. Because this area of the world will struggle to regain past levels
of plant operations, it will act to overstate the worlds capacity to produce refined butadiene. If we subtract
this area of the world from our bal-
ance, the global view of plant opera-
tions changes quite dramatically. Dur-
ing the period from 1994-1998, ca-
pacity was added at a 3.0 percent
average annual rate of growth while
demand was growing at a rate of 4.3
percent. From 1999-2004, capacity
additions will slow to a AAGR of 2.8
percent, but demand is forecast to in-
crease by 3.9 percent on an average
annual basis. This difference between
demand growth and capacity addi-
tions will push butadiene plant opera-
tions in the world (excluding East Eu-
rope and the Former Soviet Union)
to rates that will average more than
90.0 percent of nameplate capacity by
2001 and continuing through the period.
A review of the change in trade patterns for butadiene and its major derivatives finds that net trade will
remain relatively constant around 500,000 tons during 1999 and 2000, but a surge in butadiene trade to North
America in 2001/2002 will push net trade above 600,000 tons.
North America is adding ethylene production capacity during the period from 2000 to 2003 such that
idled butadiene extraction capacity must be restarted and a new grassroots extraction plant must be built to
purify the crude butadiene that will become available. The investment return on butadiene extraction units has
not been sufficient to justify the construction of a grassroots extraction plant in the past. Older units will
experience some capacity creep during the period, but a new plant will not come on stream until the second
half of 2002 when the SHELL/BASF/TotalFina joint venture extraction unit (408,000 tons) is planned. Crude
butadiene will be destroyed by hydrogenation or co-cracking until North Americas new butadiene extraction
capacity comes on stream.
The 2000 World Butadiene Analysis is CMAIs the 19th annual review of the factors that impact
supply and demand for butadiene. Included in the analysis are capacity tables for all producing and consuming
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
0
10
20
30
40
50
60
70
80
90
100
Prod. 3.9 Demand 4.0
Capacity 2.8 Op. Rate
%AAGR 98-04
WORLD - Excluding East Europe & FSU
BUTADIENE SUPPLY/DEMAND
Thousand Metric Tons % Oper. Rate

plants in the world. Supply/demand

balances include historical information
for 1994 through 1998, an estimate for
1999, and a forecast for 2000 through
2004. Also included are maps that
show producing and consuming loca-
tions by country and trade grids for
both refined butadiene and crude
butadiene. The analysis also includes
a forecast of butadiene prices in the
United States, West Europe and S.
Korea for the forecast period.
For further information please contact:
Ms. Debbie Rhoden
CMAI
11757 Katy Freeway, Suite 750
Houston, TX 77079 U.S.A.
Tel: 281 531-4660 Fax: 281 531-9966
Email: Drhoden@cmaiglobal.com
###
1700
1900
2100
2300
2500
2700
2900
94 95 96 97 98 99 00 01 02 03 04
BASF/TotalFina
Shell Chemical
PEMEX
Nova/UCC
FPC USA
Dow Canada
Dow
Others
Base
BDE Cap.
NORTH AMERICA OLEFINS EXPANSIONS
CRUDE BUTADIENE EQUIVALENTS
Thousand Metric Tons

Assumes the following expansions:

Equistar 7 kTons (1999)
Exxon 23 kTons (1999)
Huntsman 22 kTons (1999)
Huntsman 12 kTons (2000)
Huntsman 11 kTons (2001)
Shell Chemical 34 kTons (Nov 1999)
Shell/BASF/TotalFina 408 kTons (mid 2002)
TPC 16 kTons (1999)
TPC 20 kTons (2001)