BDO price rises to its peak! Downstream PBAT gains remain unchanged

As of March 1, the average domestic BDO producer price was 31,750 CNY/ton, an increase of 141.9% from February 1. It is reported that the BDO growth rate ranks first among the 64 chemical products monitored by the monthly fluctuation range, and the current price has reached the highest level in the history of the past 12 years. An authoritative person told the Institute of Biodegradable Materials that there is no reason why BDO will fall below 20,000 this year and next year. The normal adjustment is 35,000-25,000 yuan, maintaining the price range of 25,000-28,000.

At present, the mainstream negotiation for spot bulk water in East China is 30000-32000 CNY/ton, and the negotiation for barreled water is 31000-33000 CNY/ton; the mainstream negotiation for spot bulk water in South China is 30000-32000 CNY/ton, and the negotiation for barreled water is 31000-32000 CNY/ton. Flat.

Low CALCIUM carbide prices and low operating rates push up BDO prices

The price of Calcium Carbide has been rising since October 2020, and has fallen around New Year's Day. The Calcium Carbide market is currently rising slightly. On the one hand, calcium carbide enterprises have started to maintain stability, and the output of calcium carbide has not increased, and manufacturers are tightly supplying; at the same time, the raw material reserves of PVC enterprises in the early stage are limited, and the situation of replenishment after the holiday is common, and most of them are still low after the holiday; on the other hand, the price of PVC has risen sharply after the holiday. In addition, the start of PVC construction continued to be high, which drove the price of calcium carbide to rise. Therefore, Guosen Securities expects that calcium carbide prices will remain stable in the future, which will support BDO prices.

Although the resumption of work and production in the post-epidemic era has greatly advanced, until 2021, the overall operating rate of BDO will remain at the level of 60%-70%. Since the second half of 2020, the downstream PTMEG of BDO and the spandex industry chain have been very hot. The market has been out of stock or the supply is tight, supporting the upward price.

BDO support is strong, and the main growth point is concentrated in the emerging industry PBAT

In addition, BDO downstream can be applied to PBAT (biodegradable plastics). With the support of favorable policies, biodegradable plastics have entered a period of accelerated development, and the demand for BDO has increased significantly. According to the calculations of Guosen Securities' chemical team, PBAT has a planned production capacity of 5.07 million tons, and it is expected to add 1.88 million tons of new capacity in two years, which will drive the demand for 808,000 tons of BDO, and the price of BDO will remain high.

According to the Orient Securities Research Report, as of 2020, the domestic BDO production capacity has reached 2.23 million tons, while the output has just exceeded 1.5 million tons, and the industry operating rate is around 70%. The rapid development of biodegradable plastics is expected to completely reverse the BDO industry trend. If the domestic PBAT production capacity under construction and planning reaches full production, there will be an additional demand for BDO of at least 2.7 million tons, even exceeding the total domestic BDO production capacity.

BASF substantially increases the price of BDO in Europe

From March 1st or as permitted by the existing contract, BASF will increase the sales price of its 1,4-butanediol (BDO) and its derivatives in Europe:

Note: 800 Euro=6224.08 RMB

BDO and its derivatives have a wide range of applications in the chemical industry. These include the manufacture of engineering plastics, polyurethanes, solvents, electronic chemicals and elastic fibers.

In 2016, BASF and Xinjiang Meike launched a new PolyTHF® plant. The plant has an annual production capacity of 50,000 tons of polytetrahydrofuran. It was established as a joint venture between BASF and Markor and registered under the name of BASF Markor Chemical Manufacturing (Xinjiang) Co., Ltd. The plant complements BASF's existing Asian production facilities in Shanghai, China and Ulsan, South Korea.

PolyTHF® is also an important intermediate for the manufacture of thermoplastic polyurethane elastomers (TPU). These products are used for highly wear-resistant and flexible hoses, films and cable sheaths. Other applications include thermoplastic polyetheresters, polyetheramides and cast polyurethane elastomers, which have been proven to be used in skateboard wheels and inline skates.