Nexant, Inc. today announced the release of a special report analyzing the strategic impact of structural changes in feedstock usage on the C4-based chemical business and butadiene markets. This new Nexant report—Developing Fortunes of the C4 Value Chain—examines the effect of increases in lighter feedstock cracking in the Middle East and considers future implications associated with shale gas production in North America and coal-to-olefins (CTO) in China.

“Future production of global ethylene will likely rely less on naphtha cracking as alternative feedstocks become increasingly abundant and competitive within the sector,” said Lee Fagg, Nexant Principal (Asia). “However, this evolving trend will result in a further tightness in the supply of mixed C4 and butadiene—essential materials used in the production of synthetic rubbers and engineering plastics.”

A severe tightness in butadiene is evident today and reflected in record high pricing and increased pricing volatility. The C4 sector is now faced with a number of challenges and opportunities. To develop successful strategies for this market, industry players will need to address the following key issues:

• What are the expected future supply trends in the ethylene sector in terms of feedstock options, operating rates, and plant locations?
• How will U.S. shale gas production and China’s CTO impact global butadiene markets?
• What are the major development trends in downstream C4 processing and end user markets?
• Are new investments in on-purpose butadiene production a viable solution and will they result in a new pricing paradigm for the sector?

In addressing these issues, the report builds on Nexant’s technical expertise and extensive knowledge in the area of commercial olefins, petrochemical market dynamics, and regional ethylene production competitiveness.

Developing Fortunes of the C4 Value Chain is available immediately. For more information on this and other Nexant reports, please visit: http://www.chemsystems.com or contact Lee Fagg at lfagg@nexant.com.

ABOUT NEXANT

Nexant specializes in a broad range of advisory services to the global energy and chemicals sectors, including feasibility studies, mergers and acquisitions, and strategic planning. Nexant offers a comprehensive suite of best-in-class energy enterprise software designed to transform utility business processes and implement smart grid and energy conservation initiatives. Over the last decade, it has developed and commercialized technology solutions—such as iEnergy^TM, GRID360^TM, iHEDGE®, and RevenueManager®—enabling utilities, power producers, and retailers to operate and deploy new technologies and applications in the emerging grid. Operating from 32 offices in the U.S., Europe, the Middle East, Asia, and Africa, the company's team of industry professionals has completed more than 3,000 client assignments in over 100 countries, and its software operates in over 120 control centers at utilities worldwide. Its clients include major utilities, transmission and distribution system operators, chemical and petroleum majors, financial institutions, government agencies and Fortune 500 companies.