Polybutadiene Rubber           

*Metric tons per year, net rubber basis (includes elastomer hydrocarbon and extender oils, but not carbon black). Commercial production is by solution polymerization of butadiene monomer. Capacities of American Synthetic Rubber, Bridgestone/Firestone and Goodyear are multi-purpose, with capability of producing solution polybutadiene rubber (BR) or solution styrene-butadiene rubber (SSBR). Bridgestone/Firestone produces small quantities of high-vinyl polybutadiene at Lake Charles, LA.

Last year Goodyear announced a 110,000 ton expansion at Beaumont, TX. The capacity increase will be staged over six years with the first addition coming on line in August, 2000. In 1999, Bayer added 75,000 tons of capacity to Orange, TX. Bridgestone/Firestone is presently increasing capacity at Orange, TX, to 150,000 tons. Completion is scheduled for 2001.

Profile last published 4/7/97; this revision, 4/3/00.

DEMAND
1998: 561,000 metric tons; 1999: 571,000 metric tons; 2003: 618,000 metric tons, projected. Demand includes imports (1998: 98,000 m.t.; 1999: 95,000 m.t.) but not exports (1998: 170,000 m.t.; 1999: 211,000 m.t.).

GROWTH
Historical (1994 - 1999): 3.3% per year; future: 2.1% per year through 2003.

PRICE
Historical (1994 - 1999): High, $0.82 per pound (list), clear rubber grade, t.l. or c.l., f.o.b. works; low, $0.82, same basis. Current: $0.82, per pound (list) clear rubber grade; plastic grade, $0.02 per pound higher, same basis. Significant discounting exists in the market.

USES
Tires and treads for automobiles, trucks and buses, 72%; high-impact resin modification, 25%; industrial products (conveyor belts, hoses, seals and gaskets) and other, 3%.

STRENGTH
BR is the second largest-volume synthetic rubber claiming 23% of synthetic rubber consumption in all applications. The tire business remains sound and continues to expand. BR's use as an impact modifier for styrenics continues to grow at more than twice as fast as applications in tires and tire products. BR exports remain strong, although much of the volume may be going to producers' overseas affiliates.

WEAKNESS
Last year's increase in the price of butadiene has caused significant price fluctuations in the market price of BR. These fluctuations, however, have all been below the list price which has be constant for the past several years. The tight butadiene situation will probably continue for another year, and too its affect on the BR market.

OUTLOOK
Technology is driving the tire polymers market. Innovations in the tire industry, including better traction, lower rolling resistance, longer wear, and run-flat capability, are pressuring elastomer suppliers to improve their products. The International Institute of Synthetic Rubber Producers forecasts indicate North American BR consumption will rise from last year's 571,000 metric tons to 632,000 tons in 2004, an annual growth rate of 2.1%.