Butene-1

*Millions of pounds per year of butene-1 for chemical use. ChevronPhillips Chemical, BP Chemicals and Shell Chemicals produce butene-1 and a range of longer chain linear alpha olefins (LAO's) using processes based on ethylene oligomerization. ExxonMobil and Texas Petrochemicals recover butane-1 by distillation of MTBE (methyl tertiary-butyl ether ) raffinate.

BP Chemicals and Texas Petrochemicals are 100 percent merchant suppliers. The other producers consume a portion of their butene-1 production internally as a comonomer in polyethylene manufacture.

Amoco merged with British Petroleum to become BP Amoco in 1998. In July 2000, BP Amoco Chemicals reverted to the name BP Chemicals after BP Amoco decided to adopt a new unified global brand, centered on the name BP. The new name embraces British Petroleum, Amoco, Arco and Burmah Castrol, all acquired by BP.

Chevron and Phillips Petroleum Company merged their chemical operations into a 50-50 joint venture in 2000. The new entity is called ChevronPhillips Chemical Company.

Exxon and Mobil merged in 1999 to form a new company, ExxonMobil.

Profile last published 8/16/99 ; this revision, 3/29/04 .

DEMAND

2002: 570 million pounds; 2003: 577 million pounds; 2007: 625 million pounds, projected. Demand equals production plus imports, less exports. In recent years, imports have ranged from 4 to 6 million pounds per year and exports have been approximately 100 million pounds per year. 

GROWTH

Historical (1998 - 2003): 1.5 percent per year; future: 2 percent per year through 2007.

PRICE

Historical (1998 - 2003): High, $0.36 per pound, Gulf, tanks, f.o.b. works; low, $0.30, same basis. Current: $0.36, same basis.

USES

Polyethylene comonomer, 65 percent (55 percent LLDPE, 10 percent HDPE); polybutene-1, 14 percent; valeraldehyde, 10 percent; 1,2-butylene oxide, 5 percent; miscellaneous, including n-butyl mercaptan, sec-butylphenols and solvents, 6 percent.

STRENGTH

Strong demand for polyethylene, the largest market sector at 65 percent, will keep butane-1 in demand; despite competition from other comonomers (see WEAKNESS). Linear Low-Density Polyethylene (LLDPE) and High-Density Polyethylene (HDPE) resins are growing at respective rates of 5.5 and 4.5 percent annually. Because of the comonomer displacement by other alkenes in the fastest growing segments of the polyethylenes, butane-1 will experience growth of somewhat less than half the thermoplastics’ growth rates. Not spectacular, but still respectable growth.

WEAKNESS

Butene-1 is heavily dependent on polyethylenes, which account for 65 percent of its market demand. Since the mid 1980s, however, both hexane-1 and octane-1 have gained preference as a comonomer in polyethylene synthesis because of improved performance properties – improved tear, strength and stress crack resistance. Butene-1 is less expensive than the alternative comonomers, so the loss in market share is somewhat mitigated by the more favorable economics of production.

OUTLOOK

The polyethylene business sector is healthy and thus, so is butane-1. Polyethylene producers achieved significant price increases in 2003 to offset the margin squeeze imposed by higher ethylene costs, which were driven by significantly higher natural gas prices. Industry participants are looking to 2004/2005 for a rebound in polyethylene, which will translate into market pull for butane-1. Demand growth for butane-1 is forecast at 2 percent per year, through 2007.

HISTORICAL DATA