BUDAPEST—Hungarian petrochemical group MOL is on track to complete the construction of its new solution styrene-butadiene rubber plant in Tiszaujvaros, Hungary, by the end of 2017, the company has confirmed.
At a capital markets day presentation Nov. 7, company officials provided an update on the $335.1 million SSBR project, in which MOL holds a 49 percent stake, with the remaining 51 percent owned by JSR Corp. of Japan.
The 60 kilotons per year synthetic rubber facility is being built near the site of MOL's new 130 kilotons per year butadiene production plant, which was started up in November last year.
Around 40 kilotons per year of output from this facility will go to the new SSBR plant, company officials explained. The rest of the butadiene capacity will be sold mostly to European markets.
The Tiszaujvaros butadiene plant was constructed with an investment of $154.7 million.
SSBR is currently finding strong demand among tire makers, who use the material in the manufacture of low-rolling resistance tires. This has driven a number of projects by suppliers, including Trinseo, Asahi Kasei, Sumitomo Chemical and Zeon Corp, who are seeking to advance their position in this fast-growing market.
Meanwhile, Hungary is continuing to attract significant investments by tire makers, with a major new Apollo plant soon to join facilities already operated by Bridgestone, Hankook and Michelin in the country.
MOL's SSBR project is part of a group-wide ‘transformation' program, under which the Hungarian group aims to steer toward more profitable areas of business and away for less attractive and oversupplied markets, such as ethylene.
At its capital markets day presentation, MOL said U.S. shale gas developments were threatening the ethylene leg of European petchem industry, while the economic slowdown in Asia was turning ethylene polymer exports towards Europe.
Moreover, it said, as naphtha crackers are not competitive against ethane-based producers, operators had to increase their focus on efficiency improvements and higher value derivatives
Propylene offered a more attractive route, said Mol, noting that markets in this sector are attractive due to supply constraints and do not suffer from cost-disadvantage. The segment, therefore, warrants investment in innovation around both product and feedstock.
Butadiene is only about a tenth the size of the propylene market and likely to see some “severe price changes”, according to the Hungarian group. However, it added, the product stream offers some profitable opportunities in the longer term.