BUTADIENE MARKET ANALYSIS

Market Concentration and Competitive Landscape

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The global butadiene market is experiencing significant growth due to rising demand for polybutadiene rubber in tire manufacturing applications. Polybutadiene rubber is a key raw material used in the production of tires as it provides strength, flexibility and wear resistance. Currently, over 60% of all polybutadiene rubber produced globally is consumed by the tire industry. As automobile production continues to increase steadily worldwide, tire demand is experiencing a parallel rise. For example, data from the International Organization of Motor Vehicle Manufacturers shows global automobile sales increased over 4% in 2021 from 2020 levels, reaching just under 79 million units. With more automobiles on the road, tire replacement rates are also rising which is further stimulating polybutadiene rubber consumption.  This steady growth in the tire industry shows no signs of slowing in the coming years. Most forecasts predict automobile sales will grow at least 3-4% annually through 2025. Emerging economies like India and Indonesia are expected to see especially strong growth in vehicle ownership as personal income levels rise across larger segments of the population in these nations. As a result, demand for replacement tires in these developing auto markets will steadily support increased butadiene consumption for polybutadiene rubber production to meet this need. Other uses of butadiene in markets like plastics and latex are also expanding but at a more modest pace compared to its role as a base material for the resilient tire sector.