Chemical Conversations: Butadiene Outlook

Author Argus

Lauren Williamson talks to leading olefins expert Angie Joe about the Argus Butadiene Outlook:

  • Market direction and underlying trends over the next 12 months
  • Expansion projects and regulatory policies that could affect prices and trade flows
  • Information or visuals with deep relevance to the market
  • How we forecast 24 months ahead
  • Insights to help subscribers make better business decisions

This podcast is delivered by Argus’ butadiene expert using data and insight from the Argus Butadiene Outlook.
Get more information and request a free trial


Lauren Williamson: Hello everyone. And welcome to this "Chemical Conversations" podcast for the butadiene outlook brought to you by Argus Media. I'm Lauren Williamson, vice president for commercial product, and I'm joined by Angie Joe, vice president and lead for C4 butadiene. Angie, there is so much going on in the world today, and huge reverberations from energy all the way down to knock-on effects in the butadiene market. What's the overall direction of this market over the next 6-12 months? And what are some of the biggest factors underpinning those trends right now?

Angie Joe: I would say number one, what we have to bear in mind is that butadiene is a co-product. Meaning, it is primarily produced via cracker, and so the amount of butadiene that is manufactured is highly dependent on the rest of the olefins value chain. So with that, the story about butadiene is very rarely about BD and instead, it encompasses a number of other macro factors. These include anti-dumping duties, whether it be on tyres or derivatives, high power prices in Europe, or economic sanctions.

Lauren: Over the next six months or so, what are some of the biggest potential capacity expansions or supply disruptions that you see out there, and maybe tie in a little bit about producer economics for us?

Angie: Sure. I would say that a big concern of mine is the ongoing high power prices in Western Europe. We noticed this back in October of last year, and it has continued to erode BD producer margins within Western Europe. Now, what we saw in October is a few derivative producers who announced energy surcharges, on average, probably about 250 to 300 euros per ton for various derivatives. However, the BD producers have struggled to regain some of that lost margin in the same time period. And what could happen over the next six months or even in the next few years is that BD producers could go back to consumers and ask for volume relief simply because they are not making sufficient margin on BD production. And we could also see a curtailment of spot supply from Europe. The reason why this is key is because Europe historically has been a net exporter of butadiene, and if their margins are squeezed and they have less spots to offer to the market, then buyers, importers from other regions will have to find alternative sources.

Lauren: I know you discuss all of this and look at different scenarios in the Argus Butadiene Outlook, but maybe you could tell us a bit more about your favorite elements of this service, aspects that readers might miss or not realise just how important they are to assessing the market.

Angie: What I really enjoy about the Argus Butadiene Outlook is taking a deep dive into the fundamentals. A lot of people focus on historical margins between butadiene and naphtha particularly for the European and Asian regions. But what I like to do is to look at what I consider the soft factors of the market. So it may be that the US when they import, is very restrictive on BD specifications because of the restrictions on the US BD pipeline. They don't like butadiene with the high dimer content, which many Asian producers make. So it's a problem. So it's very limited in terms of whom they can import from within the Asia region. It's key factors like this that I enjoy looking into, exploring to understand the why, because if you just look on paper, it may seem very odd that one lower price region is importing from what appears to be a higher price region, but there are other factors behind the story.

Lauren: Absolutely. And I think some of my favorite aspects of the report, if I put an analyst cap on, there are pieces of it that make it just so easy to scan going into page three and four, looking at those price differentials that you mentioned between regions, easily seeing what's changed on page one, between one forecast to the next, and being able to just click through to that Excel file. That data and download makes it really easy to grab that data and then use it. And you do such a good job of looking through different scenarios and the impacts on the market, so I'm wondering if you could also share with us, what's your approach to forecasting 24 months ahead? How do you come to your conclusions?

Angie: Well, of course, the first step is to look at energy and the development of prices across the board from crude to particularly naphtha because butadiene historically has looked at the spread between BD and naphtha in terms of measuring margins. But as I've said, we are noticing that there are a lot of other what appears to be minor details that end up being very big risk factors to the market. One example is the semiconductor chip shortage, none of us were prepared for the amount of cars that would not be produced simply because there weren't enough semiconductor chips. So I really enjoy looking into those kinds of factors and determining what that will mean to the overall butadiene price development.

Lauren: Are there any other key insights you want readers to take away when they look through the outlook service that might help them make better business decisions?

Angie: I think the biggest differentiator is that we are not just relying on historical spreads of what worked 5 years ago or 10 years ago or 3 years ago, that we are actively making the calls to everyone along the chain, from producers, to consumers, to marketers, to traders, even to logistics contacts, because what we really wanna do is get the real story behind the numbers. And once you understand what the narrative is, then you can go back and see how that will play out in terms of a price forecast.

Lauren: Well, thanks Angie for your time today, and thank you so much for listening. We hope you found it useful. And to find out more about the Argus Butadiene Outlook or other Argus chemicals products, please visit

This podcast is delivered by Argus’ butadiene expert using data and insight from the Argus Butadiene Outlook.
Get more information and request a free trial

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