How is China's high-purity isobutene capacity evolving and what does it mean for pricing?

How is China's high-purity isobutene capacity evolving and what does it mean for pricing?
China's high-purity isobutene capacity is expanding rapidly, with Shandong province alone accounting for over 35% of national capacity in 2024, concentrated in Zibo, Dongying and Yantai. Provincial high-purity capacity is projected to reach 800,000 tonnes/year by 2025, with demand growth estimated at 6-8% annually. The demand pull comes primarily from new-energy vehicle tires requiring low rolling resistance and high air retention, plus high-end lubricant additives and medical rubber stoppers. On the supply side, feedstock costs remain the key price driver—international crude oil movements directly impact refinery C4 stream pricing, with Brent averaging $85/barrel in Q1 2025. The competitive landscape includes both MTBE cracking and tert-butanol dehydration routes, with major players such as Sinopec Beijing Yanshan, Yuhua Group and Qixiang actively expanding. This capacity build-out is gradually easing the historical tightness in polymer-grade material, though the shift toward higher-purity applications continues to support a structural premium over chemical and industrial grades.