Summary of the Butyl Cellosolve Market in H1, 2017

1.Price

BCS Price

The Chinese butyl cellosolve (BCS) market showed a downtrend in H1, 2017. The highest price in East China was RMB 10,800/mt (mid-February and mid-March) and the lowest price was RMB 8,550/mt (H2 June). The average price was RMB 9,776/mt, up 27.94% year on year. The highest price and lowest price of BCS in South China were RMB 11,100/mt (H2 February) and RMB 9,100/mt (H2 June). The average price was RMB 10,273/mt, which was up 31.81% year on year.

First Phase: The BCS market fluctuated in January 2017.

In January 2017, downstream producers of BCS exited the market on the coming New Year and Spring Festival holidays. Moreover, the demand was weak influenced by the haze. As for the supply, the inventory at ports increased, and most traders had to cut prices to ease the sales pressure. Hence, the mainstream market price of BCS fluctuated downwards.

Second Phase: The BCS market inched up from early February to the end of February.

On the one hand, the ethylene market price jumped in H1 February and the price increased by $165/mt CFR NEA. EO prices increased for three times. On the other hand, middlemen operated actively after the Spring Festival holiday. The BCS market went up on the increasing demand and high raw materials prices.

Third Phase: The BCS market declined from the end of February to H1, 2016.

At the end of February, the unit at Jiangsu Dynamic Chemistry restarted and the import volume increased slightly. However, the downstream demand recovered slowly. Some traders cut prices to get funds back. Then the EO prices plummet, which weighed on the BCS market. Therefore, the BCS market slid.   

Forth Phase: The BCS market moved sideways in H2, June.

In H2 June, most traders were unwilling to sell goods as they suffered great loss on the decreasing BCS prices. The mainstream BCS market turned to be stable.

2. Supply

BCS Import

The total import volume of BCS in H1, 2017 was 79,151mt, up 8.14% from H2, 2016 and down 1.80% from H1, 2016. First, the import volume in H1 is usually more than the volume in H2. Second, units in Lotte was shut in March. Then the unit in Petronas was shut suddenly in mid-April and the unit underwent maintenance for a long time. Hence, the import volume in H1, 2017 declined from H1, 2016.

As for the supply in the Chinese market, Jiangsu Dynamic Chemistry’s unstable production led to the low operating rate. Moreover, the unit at Jiangsu Yida Chemical switch to produce other alcohol ether ester products.

3.Demand

Coatings Output

Given the strict environmental protection, the coatings producers showed a different trend. The small-sized producers with high pollution exited the market. For the large-sized producers, they expanded their capacity and upgraded actively. But the application of BCS in coatings was limited. The increases in coatings’ output had limited influence on the BCS market.

4. Forecast

In H2, 2017, the import of BCS will change greatly. The unit at Dow’s Sadara has been put into normal production from June 8, 2017. It is predicted that the first order to China will arrive in H2 September. Second, the unit at Petronas will continue to undergo maintenance, and there will be no goods to China. Third, considering the weak demand in China, Eastman will not export BCS to Chinese market. On the whole, the BCS market may slide in H2, 2017.