BDO market trend continues to rise in China

April 3rd, News

According to the commodity market analysis system, from March 27 to April 3, the BDO price in China increased from 8,157 CNY/ton to 8,433 CNY/ton, with a price increase of 3.39% during the period, a month-on-month increase of 14.41%, and a year-on-year increase of 5.97%. Currently, the supply of BDO is reduced, and the favorable conditions for the supply side still exist. The overall operation rate of the downstream industries has improved, leading to an increased consumption of raw materials. The supply and demand pressure for BDO is manageable, supporting the suppliers' firm market stance, while the downstream sector follows up with contracts based on demand.

Supply Side: In terms of facilities, although the major line of Tianhua has restarted, many facilities are still under maintenance. The supply volume is moderate, and the favorable support from the supply side continues, bolstering the suppliers' confidence in maintaining prices. The BDO supply side is influenced by positive factors.

Statistical Summary of Operating Conditions for Some Manufacturing Facilities:

Cost perspective, the factory price of calcium carbide in China has decreased from a high level. As the previous price increase led to improved profitability, more production units have resumed operations, and supply has gradually increased. The methanol market is experiencing high-level fluctuations, supported by factors such as steady inquiries and purchases from downstream olefin facilities, and the optimistic expectation of the restart of MTO plants in East China. The raw materials, calcium carbide and methanol, are fluctuating within a range, and the BDO industry continues to face loss pressures. However, there are favorable cost factors influencing the BDO cost perspective.

Demand Side: On the downstream side, PBT industry operating rates have increased, and demand from other downstream sectors remains stable, resulting in overall stable demand levels. Upstream raw material prices are trending stronger, putting upward pressure on costs, and spot market quotes are generally at higher levels. The demand for BDO is being supported by favorable factors.

Market Forecast: With weakening support from the supply side and disruptions in cost transmission throughout the industrial chain, market prices are expected to rise initially before stabilizing. As maintenance units resume operations, the supply of goods will increase significantly, thereby reducing the bullish support on the supply side. Meanwhile, downstream demand shows no significant improvement, potentially intensifying supply-demand pressures and weighing on industry sentiment. BDO analysts forecast that the Chinese BDO market will mainly consolidate after a period of price increases.