Neches Butane Products' butadiene plant at Port Neches, Tex., is the world's largest—it supplies Texas-U. S. Chemical and Goodrich-Gulf Chemicals. Its rated capacity is 220,000 short tons a year; this will be expanded t o 300,000 short tons by mid-1958
Butadiene—Overexpanded but Moving Overcapacity exists in butadiene market but industry is optimistic; JDUTADIEINE HOLDS an honored
new outlets m a y open up in the future spot
in chemical marketing: It is one of the few billion-pound-a-year chemicals. This distinction was earned through its role as a raw material to make SBR ( styrene/butadiene rubber, formerly GR-S). But butadiene has had high and low output years depending on synthetic rubber demands. N o w with four steady growth years, over-capacity brought o n b y rapid expansions the past two years plagues the market. Competition gets keener and price cuts become a possibility. Several years will probably pass before the production/capacity gap closes. Although the gap now runs about 300,000 short tons a year, butadiene makers are not about to quit the field. Expansions since 1955 were geared to synthetic rubber's short and long term growth. Slow to materialize to the degree expected, the growth 76
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potentials are still there—and elsewhere, butadiene makers feel. Market research staffs have intensified the search for new butadiene outlets. Copolymers are one possibility. Synthesis intermediates loom as another promising field—butadiene is a highly reactive chemical, a fact which drew little market attention in the past. Overcapacity is not the only driving force which spurs the hunt for new markets. There are threats to SBR's dominance in the synthetic rubber field. These shadows are thrown by butyl rubber, polyisoprene (synthetic natural rubber), and polyurethane. More long term than short term in potential, these rubbers are not made from butadiene and they pose a threat to SBR production and, in turn, to butadiene output. But not so with cis-polybutadiene, whicb could be a natural rubber substitute.
R a p i d Expansions Two and one half years have passed since the industry purchased some $300 million worth of government-owned synthetic rubber plants—including butadiene plants. Then, petroleum-derived butadiene capacity was 621,000 short tons distributed among 12 companies. Between the purchases in May 1955 and December 1956, capacity was expanded to 748,000 short tons. Further expansions this year raised capacity to 1,076,400 short tons—a 7 3 % increase since the purchases. Copolymer, Dow, Esso Standard, Humble, Petroleum Chemicals, Petro-Tex, and Phillips added to their plants and raised the nation's butadiene capacity by 150,900 short tons. Meanwhile, Firestone Tire & Rubber, Odessa Butadiene, and Texas Butadiene & Chemical brought new plants on stream in Texas. These
From Under Capacity to Over Capacity in Two Years. And the Capacity-Production Gap Won't Close Until the Early '60's 1.25
^ ^ ^ • ^ ^ ^ • e » Butadiene Production
β β β ^ β β β β ^ Butadiene Rated Capacity
-*t^KSeflÇ^KiAV^lV\^X^VS\AVv^^CyiB
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.75 *- -
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.50
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1955
1956
units added another 176,000 short tons t o the butadiene pool. Firestone's plant was completed last month. But t h e firm plans to increase capacity b y 5 0 % b y mid-1958. Neches Butane Products (jointly owned by Texas-U. S. Chemical a n d GoodrichGulf Chemicals) plans to finish an 80,000 short ton expansion also by mid1958. This will bring the plant's ca pacity up to 300,000 short tons, largest butadiene facility in the world. Union Carbide Chemicals, which now produces 35,000 short tons di vided among plants at Seadrift and Texas City, Tex., a n d South Charleston, W . Va., plans to build a new petro chemical plant at Putnam, W. Va. W h e n completed in 1960, it will double Carbide's present b u t a d i e n e capacity. So far, these companies are the only firms to reveal future expansion plans. Thus, butadiene capacity will p r o b ably hover around 1.2 million short tons by 1960—apparently an ample amount in t h e light of today's over capacity situation.
Overcapacity a t Present W h e n private industry bought the government-owned plants, butadiene o u t p u t ran between 100 and 1 2 0 % capacity. Today, output is down to 7 5 to 8 0 % of capacity, with some plants operating a t 6 0 % . In 1955, 13
1957
companies p r o d u c e d butadiene; today, 15 make it. All expected good growth in SBR a n d other synthetic rubbers. Consequently, synthetic r u b b e r capac ity was e x p a n d e d (often by t h e same firms t h a t m a d e b u t a d i e n e ) . Consumption by rubber, however, has not m a t c h e d capacity. For ex ample, in 1956 t h e industry consumed 761,114 l o n g tons of SBR polymer, or 6 1 . 5 % of capacity, according to an E n jay spokesman. Another butadienederived rubber, NBR ( butadiene-acrylonitrile), was expanded, too, b u t also ran m u c h below capacity. T h e outlook, however, is for con tinued growth, probably at a rate be tween 3 a n d 5 % a year through 1965. SBR then should exceed 8 0 % of capac ity, with nitrile r u b b e r around 6 0 % . Therefore, existing synthetic rubber plants are a d e q u a t e to supply these demands, a n d little expansion is ex pected. And, t h e same goes for buta diene. But the big question for butadi ene m a k e r s : H o w long will it take for production to match capacity? It's apparently anyone's guess, b u t it prob ably won't h a p p e n until after 1960. Butadiene production should total 775,000 short tons this year, a scant 2.6% b e t t e r than 1956. Next year's output should b e better—probably ex ceeding 800,000 short tons. By 1960, however, the industry ex
1958
•1960
(Est.)
pects production to reach 900,000 to 1 million short tons. T h e trade seems equally divided on these predictions. I n one company's opinion, a capacity that would keep t h e industry healthy would be 1 million t o n s in 1959 a n d 1.1 million in 1960. But t h e s e h a v e
Texas Butadiene's DEC.
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quenching 1957
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b u t a d i e n e Production
Synthetic Rubber P r o d u c t i o n .
Chemical a n d petroleum industries ; m a k e most of the Rubber Industry
butadiene, for
nntar
account
a good
share
Rubber Industry 60%
of
the rubber, too*
Rated Butadiene Capacity Expanded Rapidly the Past Two Years to Meet Expected Demands for Synthetic Rubber 1955 196& 1957 1968 (Capacities in Short Tons) Company and Location Copolymer Rubber & Chemical 23,000 3 0 , 0 0 0 3 5 , 0 0 0 35,000 Baton Rouge, La. Dow Chemical Midland, Mich., Freeport, T e x . , Pittsburg, 12,500 12,500 17,400 17,400 Calif. Esso Standard Oil 37,500 4 0 , 0 0 0 5 0 , 0 0 0 50,000 Baton Rouge, La. Firestone Tire & Rubber 40,000 60,000 Orange, Tex. Goodrich-Gulf Chemi cals* 105,000 110,000 1 1 0 , 0 0 0 150,000 Port N e c h e s , T e x . Humble Oil & Refining 50,000 5 0 , 0 0 0 65,000 65,000 Baytown, Tex. Odessa Butadiene 50,000 50,000 Odessa, Tex. Petroleum Chemicals 65,000 7 0 , 0 0 0 80,000 80,000 Lake Charles, La.
1955 1966 (Capacities in Company and Location Petro-Tex 100,000 115,000 Houston, Tex. Phillips Chemical Γ4,000 9 1 , 0 0 0 Borger, Tex. Shell Chemical 60,000 70,000 Torrance, Calif. Standard Oil of Calif. 14,000 16,000 El Segundo, Calif. T e x a s Butadiene & Chemical Channelview, Tex. Texas-U. S. Chemical* 105,000 110,000 Port Neches, Tex. Union Carbide Chemicals Seadrift, Tex. ; T e x a s City, Tex. ; South 30,000 3 5 , 0 0 0 Charleston, W. Va.
1957 1968 Short Tons) 200,000 200,000 112,000 112,000 70,000
70,000
16,000
16,000
86,000
86,000
110,000 150,000
35,000
35,000
* Texas-U. S. Chemical and Goodrich-Gulf Chemicals split the o u t p u t from the Neches Butane Products plant at P o r t Neches, Tex-, which has a rated capacity of 220,000 short tons per year; will expand to 300,000 short tons by mid-1958. Neches Butane sells none of its own o u t p u t . Publicker Industries operated t h e government-owned alcohol butadiene plant at Louisville, Ky., but it ceased production i n September 1956. had a capacity of 84,000 short tons.
It
Here's How the Styrene/Butadiene Kubber Capacity Shaped Up This Year
Company and Location American Synthetic Rubber Louisville, Ky. Copolymer Rubber & Chemi cal Baton Rouge, La. Firestone Tire & Rubber Akron, Ohio; Lake Charles, La. General Rubber Synthetics O d e s s a , Tex. Goodyear Synthetic Rubber Akron, Ohio ; Houston, Tex.
1955 1956 (Capacities in Long
l9-,7 Tuns)
50,000
68,500
43,500
57,000
60,000
75,000
150,000
190,000
230,000 40,000
160,500
160,500
241,000
Company and Location Goodrich-Gulf Chemicals Port Neches, T e x . ; Insti tute, W. Va. Phillips Chemical Borger, Tex. Shell Chemical Los Angeles, Calif. T e x a s - ϋ . S. Chemical Port Neches, Tex. U. S. Rubber Naugatuck, Conn. United Rubber & Chemical Baytown, Tex.
S O U R C E : Second R e p o r t of the Attorney General o n Competition in the Synthetic Rubber Industry.
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J u l y 1957.
1955 1956 (Capacities in Long
1957 Tons)
110,000
232,000
242,000
69,400
72,000
130,000
102,000
126,000
126,000
106,000
127,000
127,000
22,200
25,000
30,000
62,000
62,000
68,000
already been exceeded. Today, it runs alidad of demand by about 300,000 short tons per year.
Competition Keen Overcapacity has made competition keen in the butadiene business. The keenness is not felt nearly as much in long term contracts with synthetic rubber makers as it is in fringe areas such as nonrubber uses or chemical manufacture. In the coming year it is expected that competition will increase. However, the butadiene distribution pattern seems well established. Most butadiene plants are located close to synthetic rubber producers, hence most shipments (70%) are by pipeline. The rest moves by rail, but Goodrich-Gulf is thinking about shipping butadiene by barge from Texas to its Institute, W. Va., plant. Barge shipments may well be important to butadiene's future. One company, in analyzing the butadiene situation, says the market is not well organized. Specifically, there is little relation between the open list price and the contract price. Since 1955, prices have been stable, varying between 14 and 15 cents per pound, f.o.b. producer's plant. Spot prices have run a bit higher. The posted price now is about 14.9 cents per pound on the Gulf Coast. Some in the industry fear that a price cut may come in 1958. No one wants this, particularly since increased freight rates and higher raw material and labor costs have squeezed profits.
Most butadiene moves by pipeline—this tank farm and pipeline are at Texas Butadiene
Cars Control Market The butadiene market in the U. S. is largely controlled by the automobile market. Tire manufacturers break even on tires produced for new cars, make profits on tire replacements. Most tires made today are synthetics, usually SBR, and any downturn—or upturn—in auto output will be felt in butadiene production. In 1956, SBR accounted for 85% of butadiene's production. Add the other synthetic rubbers and this figure becomes 92%. The remainder went to nonrubber uses such as adiponitrile for nylon. There was no change in this pattern during 1957, and little change is expected next year. Although there is little doubt but that butadiene will remain the prime raw material for general purpose rubbers, there is the threat that new rubbers will appear which will cut into butadiene production. Esso is most optimistic over butyl's
Odessa Butadiene has eight Houdry dehydrogenation reactors, some behind heater at right DEC.
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First overseas shipment of butadiene by barge left Goodrich-Gulf at Port Neches, Tex., this month bound for A N I C at Ravenna, Italy prospects in auto tires. And, based on recent approval of butyl for army truck tires, the company has high hopes the tires will be used in general truck serv ice—although more research is needed. Esso and Humble produce butyl now, b u t Petroleum Chemicals plans a plant, General acceptance of butyl for tires would substantially cut into butadiene's production. Another threat comes from polyurethane tires which promise very long life. Cfs-polyisoprene has the same molecular structure as natural rubber, so naturally it becomes another threat to present synthetics. Goodrich-Gulf, Firestone, and Goodyear have pilot plants running, but the trade feels isoprene's price and availability are de terrents now. But counterbalancing these threats is a product which might win new mar kets as a natural rubber substituteci\s*-polybutadiene. This material has shown some interesting results, but more important it can be made from butadiene.
Future Prospects Butadiene makers expect continued growth for the chemical. This feeling comes from their confidence in ex pected synthetic rubber growth. But producers are aware new fields must b e opened so they won't depend on a single product. Many prospects could develop, Liquid polymers of butadiene hold promise as varnishes. Latexes, which 80
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have moved well so far, appear destined for further growth, although this is probably a small outlet in the over-all picture. Butadiene copolymers, such as the acrylates and vinyl pyridine types, may be ready to move. Other copolymers, such as mixtures of styrene-acrylonitrile resins and butadiene-acrylonitrile rub bers, have led to high impact plastics. Intensified market development pro grams are expected in the years ahead which should lead to n e w outlets for these copolymers. And, quite important to butadiene's future is market development aimed at its use as a chemical intermediate. Today it finds use in adiponitrile manu facture to make nylon. This provides a 30-million-pound-a-year outlet for butadiene. D u Pont's Victoria, Tex., plant is the only one to use this process, but others may pick u p t h e idea if the economics are deemed practical. Another prospect is in making Isosebacic acid. U. S. Industrial Chemi cals has just about finished a new plant at Tuscola, 111., which will use 10 million pounds of butadiene for every 15 million pounds of Isosebacic pro duced. Other intermediate prospects have been proposed by Texas-U. S. Chemical THE COVER: Feed preparation unit a t Humble Oil's Baytown, T e x · , butadiene plant after e x pansion to 6 5 , 0 0 0 short-tons-ay e a r capacity this y e a r .
and Petro-Tex, both having prepared booklets which describe these possibili ties. Here are some which are in pilot plant or commercial scale develop ment: β Tetrahydrophthalic anhydride to make plasticizers, alkyd resins, dyes, a n d fungicides. • Tetrahydrofurfural derivatives for insect repellents. • Disodio derivatives of linear and branched dimers to make synthetic lubricants, plasticizers and alkyds, polyamide and polyurethane resins. • Vinylcyclohexenes for synthetic polymers. • Teh'ahydrobenzonitrile for plasti cizers. • Tetrahydrobenzaldehyde, which may b e an antienzymatic ingredient in tooth paste. • Methylhexahydronaphthalene, which can be used as an intermediate in steroid synthesis. Thus, butadiene will probably g r o w at a rate which parallels SBR's growth. T h e trend to use butadiene as a syn thesis intermediate will likely be m o r e defined in the future. Another growth factor is the predicted world-wide shortage of natural rubber by 1965—in fact, a 300,000-ton deficit. U. S. ex ports of both butadiene and synthetic rubbers will help fill the gap until foreign production increases. In fact, the first barge shipment of butadiene left Texas this month bound for Italy.
