In August, China's BDO market continued to decline

August 29 update

According to the commodity market analysis system, the BDO market in China has seen a decline. From August 1st to 29th, the price of BDO fell from 8,400 CNY/ton to 7,571 CNY/ton, with a decrease of 9.86% during the period, and a year-on-year decrease of 7.34%.

At the beginning of the month, BDO prices in China fell significantly, with a decrease in supply. Meanwhile, the main downstream industries saw a decline in operations, reducing the consumption of raw materials, and the imbalance between supply and demand continued. Holders actively offered discounts to sell their inventory, causing the market focus to fluctuate downward.

In the early part of the month, supply decreased, while the operating rate of the main downstream industries slightly increased, leading to a higher consumption of raw materials. However, supply still significantly exceeded demand. Cargo holders lacked confidence in the future market, leading to negotiations with actual orders at discounted prices. As a result, the BDO market in China experienced a fluctuating downward trend.

Mid-month, supply increased while the operating rates of major downstream industries declined, reducing the demand for raw materials. The imbalance in supply and demand in the BDO industry worsened, and the pessimistic sentiment among market participants continued. Cargo holders engaged in negotiations with price concessions, leading to a continuous decline in the focus of China's BDO market.

As the end of the month approaches—a period marking the transition between old and new cycles—market sentiment remains largely cautious, with traders adopting a wait-and-see approach. Contract orders are being traded, while direct spot deals and negotiations among market participants remain scarce. However, the supply-demand contradiction persists, prompting industry players to maintain a cautiously bearish outlook. Meanwhile, sellers are adjusting their pricing strategies, leaning toward lower-end offers in line with current market conditions. As a result, the market is experiencing weak, volatile fluctuations.

Supply side: The second and third phases of the Lanshan Tunhe facility have restarted, while other facilities are operating relatively stably, leading to an increase in market supply. The overall load of downstream industries remains stable, with no significant increase in raw material consumption. The BDO industry continues to face pressure on both the supply and demand sides, negatively impacting the procurement and sales sentiment of industry players. The BDO supply side is influenced by negative factors.

Statistics on the maintenance and operational status of selected manufacturing enterprises:

Cost Perspective:
Regarding raw material calcium carbide, producers are experiencing smooth shipment flows. Meanwhile, downstream facilities are gradually resuming maintenance activities, leading to a decline in calcium carbide sales volumes and a shift of market inventory toward the downstream sector. As for the raw material methanol, the Chinese methanol market continues to remain weak. As of 10:00 a.m. on August 29, the reference price for methanol in Taicang, China, stood at 2,230 CNY per ton. Both calcium carbide and methanol prices are stabilizing amid minor fluctuations, while the cost impact on BDO remains mixed—showing both positive and negative influences.

Demand Side: As we enter September, the traditional peak demand season known as "Golden September and Silver October" is approaching, driving an increase in downstream production activities. For instance, key downstream industries such as PTMEG, PBT, PBAT, and GBL-NMP have begun gradually restarting their maintenance-shut equipment by late August and early September, boosting raw material consumption. Additionally, with BDO prices dropping to historically low levels, cost pressures on producers have eased significantly. This has encouraged downstream sectors to step in and replenish inventories or ramp up purchasing activities, alleviating some of the shipping pressure faced by BDO manufacturers. As a result, the demand side for BDO is poised to benefit from these positive developments.

Market Forecast: Currently, shipment pressure at BDO plants remains manageable, while industry-wide losses continue to deepen, prompting suppliers to adopt a cautious, market-stabilizing approach. Downstream industries are maintaining rigid demand for procurement, and as traders grow concerned about potential end-of-month settlement losses, their willingness to offer price concessions has softened. This has intensified the ongoing tug-of-war between buyers and sellers, resulting in limited volatility in the market. With both supply and demand showing signs of strengthening, BDO analysts expect China’s BDO market to remain largely in a consolidation phase at lower levels.