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World capacity for butadiene grew 3% per year between 2000 and 2005. During
this period, most of the capacity buildup occurred in Asia and the Middle East.
Asia, including Japan, China, the Republic of Korea and other East Asian countries,
is now the largest butadiene producing region in the world, accounting for
37% of total world capacity. From 2006 to 2011, world butadiene capacity is
expected to increase at an average rate of about 2% per year. Ten companies
account for 51% of world capacity for butadiene, as shown in the following
pie chart:

Most of the current leading producers are not expected to add capacity in
the near future. Instead, most capacity will be added by producers in China,
the Middle East and other Asian countries.
The largest single use for butadiene is in the production of styrene-butadiene
rubber (SBR), which is used principally in the manufacture of tires. It is
also used in common plastics such as telephones and carpet backing and rubber
materials such as nitrile rubber hoses, footwear and neoprene wet suits.
The Asian butadiene market has burgeoned into the largest in the world. Over
the past decade, strong demand for final goods (primarily in China) has led
to rapid expansion requiring a surge of imports into the region. Rising feedstock
costs caused prices to spike in early 2004 and intermittent equipment failure
and maintenance scheduling continued to keep prices high through 2006.
World butadiene consumption was estimated at just over 10 million metric tons
in 2006. From 2006 to 2011, world butadiene consumption is expected to grow
at an average rate of about 2% per year.
The largest growth in the world is occurring in China and Other East Asia
with growth rates of 10% and 3.3%, respectively. Elastomer production represents
roughly 50–70% of butadiene consumption in North America and Western
Europe and over 90% in Japan. Demand for butadiene in tires depends on a variety
of factors, including vehicle production, tire design and price of competitive
elastomers, including natural rubber. Large growth potential lies in areas
that currently have small or developing downstream industries, such as Asia,
the Middle East and South America.
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