APPEC: China's butadiene market to flip from deficit to surplus by 2035

China's butadiene balance is projected to shift from a current deficit to a surplus by 2035, driven by increased self-sufficiency and capacity expansion, Anthony Tso, associate director, C4s and Elastomers, APAC, S&P Global Energy, said Sept. 9.

Tso said globally, over 3 million mt/year of butadiene capacity has been added over the past five years. In 2025, global butadiene capacity is expected to reach 20.3 million mt/year, he said.

"China is moving to self-sufficiency," Tso said. He was speaking at the APPEC 2025 in Singapore, hosted by S&P Global Energy.

China has been exporting butadiene when the export market is higher than local China prices, according to trading sources. Most quantity from China moves to South Korea. According to the latest data by the Korea Customs, South Korea's butadiene imports from China stood at 5,916 mt for January to July 2025. Meanwhile, China's butadiene imports for the same period stood at 278,855 mt, according to the customs data.

Platts assessed the CFR China butadiene price at $1,095/mt Sept. 8, while local China market at Yuan 9,300/mt or $1,135/mt on an import parity basis, according to Platts' data.

Meanwhile, butadiene demand is expected to grow 3% in China during the 2025-29 period, while demand in India is expected to increase 5% during the same period, Tso said.

New opportunities

Tso said new opportunities are emerging in downstream rubber/tire markets amid the rising production of electric vehicles (EVs).

Tso said the tire replacement cycle is shorter for EV tires than for regular tires due to increased wear from higher torque and weight. Synthetic rubber is more suitable for EVs than natural rubber due to its high resistance.

Tso said global synthetic rubber demand is anticipated to grow at an average of 1.7% in the next five years, with demand for high resistant solution-grade styrene-butadiene-rubber would likely see strong growth, rising 3.6%, while emulsion-grade SBR seen increasing 0.3%.

Meanwhile, tire manufacturers moved their factories to Southeast Asia, which pushed up tire exports from Southeast Asia in recent years, Tso said. Tire exports of Southeast Asia rose 8.1% between 2020 and 2024, while export growth of China and Northeast Asia was at 4.9% during the same period, Tso said.

"Southeast Asia is seeing rising demand for synthetic rubber as it strengthens its position as a key hub for tire production and exports," Tso said.