BDO Market Trends Show Slowing Down

June 5th News

According to the commodity market analysis system, from June 1 to 5, the BDO price in China fell from 8,100 CNY/ton to 8,303 CNY/ton, with a price decrease of 0.21% during the period, a month-on-month decrease of 4.95%, and a year-on-year decrease of 1.25%. The supply and demand pressure in the Chinese BDO market still exists, and the terminal demand is poor, leading to a continuous decline in prices in downstream industries and an increase in cost pressure. Market participants have a bearish attitude towards procurement and sales, and actual transactions involve concessions, resulting in a downward fluctuation in the market trend.

Supply side, in terms of facilities, there have been frequent fluctuations. Although the load at Wanhua has been restored, Yongying and Hengli continue to be in a state of reagent replacement, and the load at Weiyuan's facility has been reduced. The industry's capacity utilization rate has declined, and the support from the supply side has strengthened somewhat. Additionally, online auction transactions have reached a high of 7950 CNY/ton, reinforcing suppliers' confidence in stabilizing the market. The positive impact on the BDO supply side has weakened.

Statistical Summary of Operating Conditions for Some Manufacturing Plants:

Cost Perspective: Regarding calcium carbide, China’s calcium carbide prices have begun to decline. Some production enterprises have accumulated substantial inventories and, in order to accelerate shipments, are adopting more flexible shipping strategies. As for methanol, prices continue to rise; inland factories are focusing on pre-sales and over-delivery, while truck-loading operations in many regions have been hampered. With calcium carbide prices declining and methanol prices rising, the impact on BDO costs is mixed—both positive and negative.

Demand Side: On the downstream side, terminal demand has shown no significant improvement. Amidst a supply-demand contradiction and sluggish cost transmission, downstream industries have resorted to price promotions, leading to declining market conditions in most sectors. The demand for BDO is being weighed down by predominantly bearish factors.

Market Forecast: The raw materials, calcium carbide and methanol, are experiencing a decline and fluctuation within a range, respectively, leading to a reduction in BDO cost pressure. In the next period, the operating rates of the downstream PBT and PBAT industries are expected to decrease, resulting in reduced demand. Taking all factors into account, BDO analysts predict that the BDO market in China will operate on a weaker trend.