Butadiene Market - Forecast(2023 - 2028)

Butadiene Market Overview

The butadiene market size is estimated to reach US$17.6 billion by 2027 after growing at a CAGR of around 4.1% from 2021 to 2027. Butadiene is colorless and has a highly reactive nature with a monoisotopic mass of 54.046g/mol and is majorly used in petrochemical, rubber, automotive tires, latexes, coatings, gloves, and others. It is produced as a by-product from propylene and ethylene manufacturing, along with aromatic hydrocarbons, and is useful in the synthesis of cycloalkanes and cycloalkenes, through diels-alder reactions. The excellent properties such as strength, heat resistance, and high performance make it the best option for application in the automotive, electronics, construction, and medical industry. The butadiene industry is growing due to the rising demand for styrene-butadiene rubber, nitrile rubber, polybutadiene rubber, and others in various end-use industries. The butadiene market will see a major drive owing to increasing production and application in automotive tires, consumer products, healthcare, packaging, and others, thereby creating a growth scope for butadiene in various end-use industries in the forecast period.

COVID-19 Impact

The COVID-19 pandemic has negatively impacted the butadiene market due to its falling demand from the automotive and tire industry during a pandemic. Butadiene is majorly used in rubber, conveyor belts, gaskets, and plastic products for automotive end-users. The automotive industry felt a decline due to low demand, production halts, and lockdown restrictions. According to the International Organization of Motor Vehicle Manufacturers (OICA), global vehicles production saw a decline of 15.8% in 2020 compared to the previous year. The declining vehicle production led to low demand and production of synthetic rubber and tires. Various auto producers such as Bajaj Auto, Maruti Suzuki, and Hero MotoCorp, Fiat, and others announced operation shutdown and suspension. According to U.S. Tire Manufacturers Association (USTMA), the spending on tires fell by approx. 15% from February to April in 2020. Thus, the low production and declining demand for tires, rubber, and other automotive components have led to a major fall in the global butadiene market share. The restriction in travel due to lockdown has impacted the automotive and aviation sectors, thereby declining the demand for tires in automotive and airline. Moreover, the recovery of automotive post-covid-19 is estimated due to high demand for electric vehicles, approved synthetic rubber projects in China, and tire manufacturing in the market. Government reforms such as Make In India are likely to boost automotive production in 2021. Furthermore, the butadiene market was negatively impacted during covid-19 due to production halt, low demand for tires and rubber, and restrictions in butadiene applications.

Butadiene Market Report Coverage

The Butadiene market report: “Butadiene Market– Forecast (2022-2027)” by IndustryARC covers an in-depth analysis of the following segments of the butadiene industry.

By Production Process: Steam Cracking, Houdry Process, Oxo-D Process.
By Product: Styrene butadiene rubber, Acrylonitrile butadiene styrene, Polybutadiene rubber, Nitrile rubber, and Others.
By Application: Synthetic Rubber, Thermoplastic Rubber, Latexes, Conveyor Belt, Surgical Gloves, Golf Ball, Tires, and Others.
By End-Use Industry: Automotive Industry (Commercial Vehicles, Passenger Vehicles, Automotive Components, and Others), Electronics Industry (Electronic Enclosures, Home Appliances, Computer, and Others), Chemical Industry, Construction, and Others.
By Geography: North America (USA, Canada, and Mexico), Europe (UK, Germany, France, Italy, Netherlands, Spain, Russia, Belgium, and Rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Australia, and New Zealand, Indonesia, Taiwan, Malaysia, and Rest of APAC), South America (Brazil, Argentina, Colombia, Chile, and Rest of South America), Middle East (Saudi Arabia, UAE, Israel, Rest of the Middle East) and Africa (South Africa, Nigeria, Rest of Africa).

Key Takeaways

• The growth in the automotive production and construction industry in the Asia-Pacific region will create a drive in the butadiene market, due to the high demand for butadiene-derived products such as polybutadiene rubber, synthetic rubbers, styrene-butadiene latex, and others.
• The styrene butadiene rubber holds a major share in the butadiene industry, owing to its application in high-performance tires, automotive components, belts, gaskets, and others.
• The rising awareness regarding environmental and health concerns, along with increasing prices of crude oil is estimated to create a hindrance in the growth of the butadiene market.

Figure: Butadiene Market Revenue, 2021-2027 (US$ Billion)

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Butadiene Market Segment Analysis – By Production Process

By production process, the steam cracking segment is expected to have the largest share of over 35% in 2021 and is expected to dominate the butadiene market in the coming years. The steam cracking process produces 95% of the butadiene as a by-product of ethylene. Light feed primarily gives ethylene when cracked, whereas heavy feeds offer heavy olefins, aromatic hydrocarbon, and butadiene. This process is majorly used owing to its advantage over other expensive distillation processes and provides an improved fuel supply. The major application from derived butadiene involves styrene butadiene rubber, polybutadiene, and others, which are majorly used in tires and automotive end-users. According to the Ministry of Commerce and Industry, the consumption of synthetic rubbers increased from 411830 tons in 2011 to 633975 in 2018. Furthermore, the consumption is estimated to reach 1.2 million by 2025 in India. Thus, the growth and demand for butadiene derived rubber and major applications in automotive will boost the steam cracking manufacturing process segment in the forecast period.

Butadiene Market Segment Analysis – By Product

By product, the styrene butadiene rubber segment is expected to have the largest share in the forecast period and is expected to grow at a CAGR of over 3.5%. It contains 23% styrene and 77% butadiene and is used as the primary material to make tires, shoe soles, and plastic materials. The SBR-1500 is a high molecular weight combining good extrusion and avoiding product degradation. The styrene-butadiene rubber has various applications such as automotive, consumer products, footwear, electronics, molded rubber products, and others. The automotive industry makes major use of styrene butadiene rubber due to its increasing dominance for automotive tires, belts, and other automotive components in the forecast period. According to the Society of Indian Automobile Manufacturers (SIAM), a total of 22,652,108 vehicles were produced, including passenger vehicles, commercial vehicles, and others in 2020. Furthermore, styrene butadiene rubber holds a major application for automotive owing to its high strength, abrasion resistance, low rolling resistance, and viscosity. Thus, the increased demand for SBR will create a drive in the market and offer a major growth share in the butadiene market.

Butadiene Market Segment Analysis – By Application

By application, the synthetic rubber segment is expected to have the largest growth share of over 40% in 2021 due to its application in the automotive industry and is expected to dominate the butadiene market size in the coming years. The butadiene is used as a major material for producing rubber and tires for various vehicles. Synthetic rubber has its application in industrial rubber, wires, belts, footwear, airplane tires, and surgical gloves. The major application is driven by automotive end-users due to its use in automotive components and tires. According to the International Organization of Motor Vehicle Manufacturers (OICA), the U.S has manufactured a total of 11.4 million vehicles in 2018, comprising 25% passenger cars and 75% commercial vehicles. Thus, the rising demand for synthetic rubber in the automotive industry for tires and other components is boosting the growth of the butadiene industry in the forecast period.

Butadiene Market Segment Analysis- By End-Use Industry 

By end-use industry, the automotive segment is expected to have the largest share of over 30% in 2021 and is expected to dominate the market in the coming years. The butadiene is used in styrene-butadiene rubber, polybutadiene rubber, nitrile rubber, and others, which are majorly applicable in tires for a passenger as well as commercial vehicles. The butadiene has a major share in the automotive owing to its excellent properties such as durability, tensile strength, abrasion resistance, oil resistance, and toughness. According to the U.S. Tire Manufacturers Association (USTMA), the total tire shipments of 336 million units in 2021 were projected, compared to 303 million units in 2020, and 332 million units in 2019. Furthermore, rising automotive projects in major nations such as China and India, along with high demand for synthetic and bio-based rubber tires will boost the scope of butadiene market, thereby creating a major growth prospect in the forecast period. 

Butadiene Market Segment Analysis – By Geography

The Asia Pacific holds the largest share of around 45% in the butadiene market size, due to the major end-use industry in the region for the year 2021 and is expected to grow during the forecast period. The demand for butadiene is high in APAC nations due to rising automotive, construction, healthcare, and electronic applications. Butadiene products such as styrene butadiene rubber, polybutadiene, and others are majorly used in tires, automotive exhausts, conveyor belts, and others. The Asia Pacific region is one of the largest producers of vehicles. According to the China Association of Automobile Manufacturers (CAAM), the estimation of more than 3 million units of production and 47% growth is made for the sale of new energy vehicles in 2021. The increasing demand for butadiene and its derivatives is likely to boost the growth in the market. Furthermore, China is emerging to dominate the butadiene market share owing to increased ethylene manufacturing preference in this region. Thus, the butadiene products will see a major growth owing to their rising dominance and application in various end-use industries, thereby creating a traction for the butadiene market in the forecast period.

Butadiene Market Drivers

An increase in Automotive productions in the forecast period is driving the demand for the Butadiene Market

An increase in automotive production has boosted the global butadiene market. Various butadiene-derived products such as polybutadiene rubber, styrene-butadiene rubber, nitrile rubber, and others are used in automotive for production of the tires, conveyor belts, and other components. The acrylonitrile butadiene rubber resin is majorly used in automotive to reduce the weight of tires, due to the rising trend for lightweight tires and vehicle bodies. The component enhancements such as wear, rolling resistance, and traction make it a preferable option in the automotive industry. According to India Brand Equity Foundation (IBEF), the CAET planned to invest approx. USD 13.50 million to expand the production of tires during 2017-2022, along with a plan to reach a production level of more than US$ 17 million annually for two-wheeler tires, 6 million for passenger car tires, and 1 million for the TBR tires. Thus, the increasing tire production and demand will create a major drive in the market and overall butadiene industry outlook.

Rise of butadiene product derivatives for industrial and medical application

The growth of butadiene for medical applications will create a major drive in the butadiene market. The acrylonitrile butadiene styrene offers high strength, resistance, and performance, which makes it suitable for industrial, electronics, and medical uses. The growth of synthetic rubber-based gloves in pandemics has led to a major rise in demand for butadiene. The demand for acrylonitrile butadiene styrene is increasing owing to the application and demand from medical end-users such as respiratory devices, miniature implants, insulin pens, and others. For instance, STYROFAN by BASF has major applications as binders in building materials, carpet, construction, and others. Furthermore, the application of styrene-butadiene for coating applications of carpet backs, paper, and others will create a demand in the market, along with the rising usability of other derivatives in manufacturing, footwear, packaging, and other applications. Thus, the global butadiene market will see a drive owing to the various industrial and medical applications of the butadiene product in the forecast period.

Butadiene Market Challenges

Increasing health concerns and safety threats can create challenges to butadiene production

The butadiene has various applications in personal care, healthcare, and automotive. The rising health concerns regarding the exposure and carcinogenic presence can become a hindrance. According to Environmental Protection Agency (EPA), the 1,3 butadiene is cited as a carcinogenic substance. Prolonged exposure can create issues such as headache, dizziness, leukemia, and cardiovascular problems. Thus, it will lead to a decrease in production and consumption of the butadiene, thereby creating a major challenge for the butadiene market due to health safety and halted production.

Butadiene Industry Outlook

Technology launches, acquisitions, and R&D activities are key strategies that are adopted by the dominant players in the market. Butadiene top 10 companies include:

1. Royal Dutch Shell Plc.
2. TPC Group Inc
3. BASF SE
4. ExxonMobil Chemical Company
5. Braskem
6. ENI S.p.a
7. LyondellBasell
8. Linde Group
9. LG Chem
10. Haldia Petrochemicals

Recent Developments

• In April 2021, ETB and Trinseo will collaborate for the development of biobased 1,3 butadiene using advanced technology such as polyfunctional catalysts to accelerate the development of renewable-sourced materials.
• In August 2019, Lion Elastomers acquired the US- Texas-based Firestone Orange plant, which produces styrene-butadiene rubber solutions, polybutadiene, styrene-butadiene block copolymers.

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