BDO Market in China Sees Slower Price Increase

May 8th News

According to the commodity market analysis system, after the holiday, the BDO price in China fell from 8,504 CNY/ton to 8,470 CNY/ton, a decrease of 0.39% within the period, an increase of 0.05% month-over-month, and an increase of 6.55% year-over-year. The operation of facilities fluctuated slightly, with a slight reduction in supply. However, overall demand downstream increased, and the supply and demand pressure was manageable. But due to insufficient terminal demand and poor transmission of cost pressure, some downstream industries experienced fluctuations and declines, mainly digesting raw material inventory or following rigid demand contracts. Spot purchases were light and involved bargaining.

Supply side, in terms of facilities, Xinjiang Xinye and Hualu have increased their operating loads, while the Sichuan Yongying facility has shown minor fluctuations. The supply of BDO has slightly decreased, but there is still support from the supply side. The positive impact on the BDO supply side has weakened.

Statistical Summary of Operating Conditions for Some Manufacturing Plants:

Cost Perspective: Regarding calcium carbide, affected by the previously low calcium carbide prices, the number of idled production units has continued to rise, leading to a tightening of market supply and triggering a rebound in calcium carbide prices from their bottom. After the holiday, as transportation capacity recovers, manufacturers’ shipments have improved, downstream customers are actively unloading and consuming inventory, and procurement activities have become more vigorous. As for methanol, many plants have entered maintenance and shutdown periods, coupled with persistently low inventories at manufacturers, resulting in a tight supply situation in the market. Meanwhile, downstream demand for restocking after the holiday has surged, driving inland prices upward accordingly. With positive trends in the prices of raw materials—calcium carbide and methanol—BDO’s cost structure is benefiting from favorable factors.

Demand Side: On the downstream side, operating rates in the downstream PTMEG and PBT industries have risen, while loadings for PBAT and PU slurries have declined. Other downstream sectors remain relatively stable. Overall, downstream demand has increased significantly, leaving a certain supply gap in the BDO industry. The impact on BDO demand is mixed, with both positive and negative factors at play.

Market Forecast: Raw materials such as carbide and methanol are showing a stronger trend, increasing the cost pressure on BDO; with some facilities restarting, the supply volume is increasing; the operating rates of PTMEG and PBT are improving, leading to an increase in demand. Overall, BDO analysts predict that the Chinese BDO market will mainly focus on consolidation.