Butadiene: Luqing Petrochemical has new changes in production and supply

Shandong Luqing Petrochemical 140,000 tons/year butadiene device started operation on August 19, 2021, the device is stable at present, part of the supply is planned to be exported recently.

In the third quarter of 2021, China's butadiene industry began a new round of capacity increment with the installation of Zhejiang Petrochemical Phase II (one set), Shandong Luqing Petrochemical and Gulei Petrochemical successively put into production.

From 2017 to 2021, the capacity of China's butadiene industry will maintain a trend of annual growth. By August 2021, the total production capacity of China's butadiene industry reached 5.446 million tons/year, an increase of 10.78% compared with 2020.

Shandong Luqing petrochemical did not form a complete set of butadiene downstream device, butadiene will be all used for export.  With the opening of luqing source export, China's butadiene regional supply pattern, as well as the northern spot supply pattern, will have certain changes.

With the luqing petrochemical plant put into operation, of the total capacity of 5.446 million tons/year at present, the capacity of Shandong province has reached 760,000 tons/year, accounting for 13.96% of the national total capacity.  

From the northern demand pattern, the downstream demand of butadiene is relatively concentrated in Shandong. Yantai haopu, Qixiang Tengda, Shandong Witt (Wanda), Zhenhua petrochemical and other private enterprises shun butadiene rubber device; And Shandong Huayu and Shandong Jusheng SBC elastomer device.

In addition, Shandong is synthetic latex (nitrile latex, styrene butadiene latex, butadiene latex) production capacity concentration.

From the perspective of supply, on the one hand, butadiene production capacity in northeast China and North China is mostly concentrated in sinopec and CNPC systems, mainly with supporting equipment, and relatively few sources of goods for sale.  At present, the northern circulation sources are mainly Dalian Hengli, Liaoning Baolai, Shenhuining Coal and Inner Mongolia Jiutai. Affected by geographical location, the above suppliers are far away from the downstream demand places in Shandong, and the circulation time of the supplies is longer.  On the other hand yantai wanhua is affected by production capacity and supply is limited.