BDO Market Conditions Remain Mostly Cautious

January 23 news

According to the commodity market analysis system, from January 19 to 23, the price of BDO in China remained at 7,357 CNY/ton, with the price remaining stable on a week-over-week basis but falling by 12.41% year-over-year. Both supply and demand increased, but the gap between supply and demand widened. The atmosphere for stockpiling ahead of the Chinese New Year was moderate, with inventory digestion or follow-up on rigid demand contracts. Some holding manufacturers were cautious and bearish in their operations, focusing mainly on selling. The BDO market in China was mainly in a wait-and-see mode.

Supply side, in terms of facilities, after the second phase of LanShan TunHe's facility restarted and operated stably, and Sichuan YongYing's facility restarted and began producing, the supply of goods in the market increased, leading to a weakening of support from the supply end. The BDO supply side is affected by bearish factors.

Statistical Summary of Operating Conditions for Some Manufacturing Facilities:

Cost Perspective: Regarding raw material calcium carbide, the Chinese calcium carbide market has seen price increases. Production enterprises are experiencing smooth shipments, yet supply is temporarily tight. In Inner Mongolia, power consumption restrictions have led to a contraction in supply; meanwhile, some power plants in Shaanxi and Ningxia have experienced malfunctions, causing a decline in the operating rate of calcium carbide furnaces and further exacerbating the tight market supply. As for the raw material methanol, the methanol market has been fluctuating and consolidating. As of 10:00 a.m. on January 23, the reference price for methanol in Taicang, China, stood at 2,260 CNY per ton. With calcium carbide prices rising and methanol prices remaining volatile and consolidating, the cost impact on BDO is mixed—both positive and negative.

Demand Side: Downstream PTMEG and PBAT operating rates have slightly increased, but the growth in demand has fallen short of the increase in supply, leading to a widening supply-demand gap in the industry. The impact on BDO demand is mixed.

Market Forecast: With the Sichuan Yongying plant increasing its load and the Wanhua plant resuming operations at full capacity, supply is set to rise. GBL-NMP production has picked up, while other industries remain relatively stable, leading to an increase in demand. Raw materials—calcium carbide and methanol—are trading in a narrow range, and the BDO industry continues to face profit pressure. BDO analysts expect the Chinese BDO market to remain largely in a wait-and-see mode, with prices likely to consolidate.