European petrochemical producers are increasingly focusing on raffinate-1 rather than butadiene extraction, as strong MTBE production economics support demand for the co-product, market participants said in the week to Oct. 12.
Raffinate-1 and butadiene are commonly produced from the crude C4 cut in Europe via a distillation-extraction process: butadiene is extracted and raffinate-1 is what remains. In further processing, the isobutylene portion in raffinate-1 is separated and reacted with methanol to produce MTBE.
With European butadiene domestic demand subdued and export opportunities beginning to revive, producers have a growing incentive to secure crude C4 for its raffinate-1 content. On Oct. 9, raffinate-1 CIF Northwest Europe reached $1,165.19/mt, moving $7.94/mt above butadiene FOB Rotterdam at $1,157.25/mt.
Raffinate-1 remained $94.36/mt below domestic butadiene FD Northwest Europe, assessed at €1,125/mt ($1,259.55/mt). The change was driven primarily by demand for MTBE from raffinate-1, with one producer citing "good margins on MTBE."
