BDO Market Conditions: Price Increase Slows Down

April 10th News

According to the commodity market analysis system, from April 3 to 10, the supply of goods increased, and the support from the supply side weakened. The overall operation rate of downstream industries in China improved, leading to an increase in the consumption of raw materials, and the gap between supply and demand for BDO widened. The market continued to see a tug-of-war between supply and demand, with the pace of price increases slowing down.

Supply side, in terms of facilities, although the first phase of Xin Ye and the second line of Hualu are shut down for maintenance, some previously maintained facilities have restarted, increasing the supply of goods. The support from the supply side has weakened, and the positive impact on BDO supply has diminished.

Statistical Summary of Operating Conditions for Some Manufacturing Facilities:

Cost Perspective: Regarding calcium carbide, the overall calcium carbide market has been characterized by oversupply, which is the primary reason for the rapid decline in prices this time. Moreover, the increase in external sales of associated calcium carbide has further boosted inventory accumulation, accelerating the downward trend in prices. As for methanol, although the pace of price increases has slowed, supported by a tight supply-demand balance and ongoing inventory destocking, prices remain generally firm despite the slowdown in upward momentum. With calcium carbide prices declining and methanol prices fluctuating within a narrow range, the BDO industry continues to face profit pressure; however, favorable cost factors are still weighing on the BDO sector.

Demand Side: On the downstream side, operating rates in the downstream PTMEG and PBAT industries have increased, while operating rates for PBT and PU dispersions have declined. Overall, demand growth remains limited, widening the supply-demand gap. Although many downstream industries have followed the rise in raw material prices, cost pass-through to end consumers has been sluggish, resulting in weak acceptance of higher-priced raw materials. The impact on BDO demand is mixed.

Market Forecast: Supply volumes are shrinking, bolstering support from the supply side and sustaining sellers’ bullish stance. Downstream demand has generally declined, and cost transmission within the industrial chain remains sluggish. Consequently, downstream buyers show little willingness to purchase spot goods at high prices, which will put downward pressure on raw material prices. BDO analysts expect the Chinese BDO market to mainly consolidate after recent price hikes.