August 3rd News
According to the commodity market analysis system, from July 1 to 31, China’s BDO price rose from 7,716 CNY/ton to 7,783 CNY/ton, representing a price increase of 0.86% over the period and a year-on-year decrease of 7.34%. In July, both supply and demand for BDO in the Chinese market increased; however, inventory pressure within the industry remained manageable, and suppliers showed strong willingness to support prices. Meanwhile, downstream industries faced cost pressures and demonstrated limited capacity to absorb higher raw material prices. As supply and demand engaged in a tug-of-war, the BDO market experienced a slight rebound after earlier declines.
Supply Side, in terms of facilities, as the previously shut-down units of Xinjiang Xinye, Lanson Biomaterials, Great Wall Energy, and others gradually restart, the industry's capacity utilization rate has increased, leading to a rise in the supply of goods. The supportive factors have weakened compared to earlier. The BDO supply side is influenced by negative factors.
Statistical Summary of Operating Conditions for Some Manufacturing Plants:
| Region | Unit Dynamics |
|---|---|
| Shaanxi Shanhua | Phase I to be shut down in early August 2024; Phase II to be shut down on February 22, 2025; restart date yet to be determined |
| Xinjiang Meike | Phase III 100,000-ton/year unit currently shut down |
| Inner Mongolia Sanwei | 300,000-ton/year BDO unit operating at around 70-80% capacity |
| Xinjiang Guotai Xinhua | Two 200,000-ton units operating relatively stably |
| Xinjiang Xinye | Phase I 60,000-ton and Phase II 70,000+70,000-ton BDO units operating steadily |
| Ningxia Wuheng Chemical | Phase II 140,000-ton unit scheduled for a 15-day maintenance shutdown tentatively in mid-August |
| Sichuan Tianhua | Phase I 25,000-ton/year and Phase II 60,000-ton units operating steadily |
Cost Perspective: Regarding calcium carbide, after the price reduction, it has been consolidating at lower levels, leading to a buildup of regional inventories among producing enterprises. Enterprises are actively shipping goods, and some have adopted flexible pricing strategies in their transactions. As for methanol, China’s methanol prices in July showed mixed trends with significant fluctuations. Coastal methanol prices experienced pronounced ups and downs. With sharp declines in the prices of raw materials—calcium carbide and methanol—the cost outlook for BDO remains tilted toward bearish factors.
Demand Side: On the downstream side, operating rates for PBT and TPU have risen, but capacity utilization rates in the PTMEG and PBAT industries have declined, leading to a slight reduction in raw material consumption and providing only moderate support overall. Many downstream industries are facing cost pressures, and there is strong bargaining sentiment in the market, which is weighing on raw material price trends. The demand side for BDO is being influenced by predominantly bearish factors.
Market Forecast: In August, with numerous plant maintenance activities and frequent agent changes, downstream end-user demand is expected to increase. However, overall demand will still fall short of the increase in supply, leading to a rise in BDO industry inventories and putting downward pressure on traders' buying and selling sentiment. Overall, BDO analysts anticipate that the Chinese BDO market will likely enter a period of consolidation.
