FAIRLAWN, Ohio—Change will continue to be prevalent among synthetic latex feedstocks, but that doesn't necessarily mean good news for the industry.
That was the message from Bill Hyde, of IHS Chemicals, during his presentation Aug. 8 at the International Latex Conference, organized jointly by Rubber & Plastics News and Akron Dispersions Inc.
For example, in the past year or so, Hyde said butadiene prices in Northeast Asia had spiked from $1,100 a metric ton to more than $4,000, before falling all the way back to current levels of about $900 a ton. That sparked a similar—though slightly different—trend for the prices in North America and Europe.
He said ethylene dominates petrochemical supply, and that 15 million tons of annual ethylene capacity is expected to come online in the next few years, resulting in a major impact on the global markets. There is planned expansions in China and North America, and friction between the capacity additions in those two regions “will define the next three to four years.”
The ethylene supply market will be soft for the next few years, Hyde said, but will begin to tighten in time for the next round of capacity expansions.
There is some concern over butadiene supply in the short term, but what is most concerning is the “risk of exposure” to unplanned events, he said. While there will continue to be volatility, it shouldn't be enough to bring the wide swings in pricing the feedstock has seen in the past year.
Hyde also said that the additional oil production in U.S. through less traditional methods, including shale oil, offsets OPEC's ability to raise prices. He does expect oil prices to trend up, but not aggressively.