BDO Market Continues to Weaken

September 26, News

According to the commodity market analysis system, from September 19 to 26, the BDO price in China fell to 7,522 CNY/ton, with a price decrease of 0.27% during the period, a month-on-month decrease of 1.20%, and a year-on-year increase of 0.88%. Some previously reduced load facilities have increased their load, and new capacities are producing premium products, leading to an increase in supply. Market participants are cautiously bearish and cautious in negotiations. Due to long-term losses in the industry, suppliers aim to stabilize the market. Negotiations between supply and demand are at a stalemate, resulting in a stagnant market situation.

Supply side, in terms of facilities, the maintenance status of the first phase of Wuheng Chemical continues, but the previously reduced load facilities such as Black Cat, Yanchang, and Hengli have increased their load operations, leading to an increase in the supply volume of the industry. Moreover, the new capacity of Xinjiang Shuguang Lvhua has started commissioning and is producing premium products, intensifying the cautious and bearish sentiment of market participants towards future prospects. The BDO supply side is expected to see positive factors influencing it.

Statistics on the operational status of equipment at selected manufacturing enterprises:

Cost Perspective:
Regarding raw material calcium carbide, the Chinese calcium carbide market saw a narrow upward adjustment in prices as producers experienced smooth shipments amid tight supply conditions. Recently, market supply has begun to recover gradually, with previously shut-down production units resuming operations one after another, and limited production curbs in Inner Mongolia also easing somewhat. As for the raw material methanol, the Chinese methanol market continues to remain weak. As of 10:00 AM on September 26, the reference price for methanol in Taicang, China, stood at 2,250 CNY per ton. While calcium carbide prices are trending upward, methanol remains under pressure, leading to a mixed outlook for BDO costs.

Demand Side: Downstream end-users continued to follow through with essential contract commitments or clear out existing inventories ahead of the National Day holiday. However, most downstream industries are experiencing profit losses and remain reluctant to pay high prices for raw materials, resulting in weak spot purchase intentions. As a result, BDO demand is being weighed down by predominantly bearish factors.

Market Forecast: As we approach the National Day holiday, downstream industries have largely completed their inventory preparations, resulting in minimal spot trading activity. Meanwhile, previously shut-down production units have resumed operations, boosting BDO supply levels. Downstream sectors like PTMEG are also ramping up production, leading to increased consumption of raw materials. With both supply and demand for BDO on the rise, market players remain engaged in ongoing negotiations. BDO analysts anticipate that price volatility is likely to remain limited in the near term.