BCS Market: Continuous Up Trend

The Chinese butyl cellosolve (BCS) market rebounded strongly recently. During one week, the BCS market jumped from RMB 8,550/mt to RMB 9,500/mt. The booming n-butyl alcohol (NBA) market was the major market. Jiangsu Dynamic Chemical raised offers for a second day. And its BCS unit was shut. Traders were unwilling to sell goods at low prices given the losses in previous days. The BCS market was expected to move up contentiously.

On July 17, Jiangsu Dynamic Chemical raised its BCS offers from RMB 9,000/mt to RMB 9,500/mt. On July 18, traders increased offers actively and the dealing price for BCS in East China reached RMB 9,400/mt.

It is predicted that the BCS market will continue to increase in the short term.

First, the increasing NBA market will still be the firm support to the BCS market. The overall supply of NBA is tight as the unit at Anhui Shuguang Chemical is undergoing maintenance and the unit at Luxi Chemical is running at low loads.

Second, the ethylene oxide (EO) market has increased for a while as some EO producers produce glycol instead of EO, which leads to the tight supply of EO. The EO market increased RMB 200/mt on July 18 and the price increased RMB 200/mt again on July 19.

Finally, the supply of BCS is tight. Though the demand doesn’t improve obviously, the supply is slightly tight. The unit is shut, and the inventory at ports is low. Players are bullish about the coming market.        

On the whole, the BCS market will fluctuate at a high level in H2 July.