BDO Market Was in a Stalemate in September

Although the chemical industry entered the traditional boom season, the BDO market was still flat. The BDO prices from suppliers were firm, while the downstream demand was weak. As the players held a complicated sentiments, the BDO market was in a stalemate. Up to September 18, the BDO negotiation prices in East China were in the range of RMB 10,400-10,800/mt. The mainstream negotiation price was stable temporarily. The spread between the highest and lowest prices was large.

In September, the majority of chemical products prices increased, while few chemical products’ prices decreased. The MDI market rose dramatically in September. On the raw material side, the methyl alcohol prices increased significantly within only one week. On the downstream side, firstly, the PTMEG market was stable and improved, as the polyurethane fibre market increased again. Secondly, as PBT units in several factories underwent maintenance, the supply was tight. The PBT prices went upwards. Thirdly, the GBL supply was also tight, because the environment protection supervision put pressure and the GBL production cost edged up. Therefore, the GBL prices rose slightly. Lastly, the TPU and PU producers increased offers, as the production cost of raw material grew. However, with prices of many products increasing, the BDO market was flat extraordinarily.

BDO Prices

The offers from mainstream factories were stable. Part of factories increased offers because production cost supported the BDO market. However, there still had resistance to negotiate in the BDO market. Majority of suppliers were willing to provide offers, but they were reluctant to sell BDO at low prices. The mainstream offers were range-bound. Up to September 18, the BDO negotiation prices in East China were in the range of RMB 10,400-10,800/mt. The mainstream negotiation prices were in a low level. Part of high-end BDO prices maintained in a high level, while some suppliers decreased the prices affected by the pressure on inventory and financing. The BDO price difference was huge.

Supply of BDO

Units in Xinjiang Tianye, Shanxi Ronghe and Fujian Fuhua underwent maintenance. Xinjiang Blue Ridge Tunhe Chemical shut the BDO units and turned to produce catalysts. Henan Energy Chemical postponed the BDO units maintenance. The operating rate of BDO produced via ethyne and FORMALDEHYDE was 58%. The inventory was in sufficient and the supply was stable. Because of air pollution prevention, part of factories in Beijing, Tianjin and Hebei were possible to decrease operating rate.

The Demand for BDO

The PTMEG market was stable. The polyurethane fibre industry entered boom season and units ran in a high operating rate. The consumption of BDO was stable. PTMEG units in Shanxi Sanwei Group restarted at the beginning of July and the operating rate was stable. Henan Energy Chemical planned to restarted PTMEG units.
The demand for BDO from PBT industry went upwards. As the PBT units took overhaul, the supply was tight and the PBT prices increased continually. However, the supply of BDO was stable and PBT factories had previous inventory. The inventory was sufficient. It is predicted that the factories will consume the previous inventory.

The operating rate in BGL factories was low affected by the environment protection. It is predicted that the operating rate will increase at the end of September. However, because of the air pollution prevention pressure, part of factories will decrease the operating rate.

The demand for BDO in TPU and PU factories was blooming. However, part of producers thought that the increasing price of raw materials put pressure on the production cost.

Forecast:

The players in BDO market will hold a complicated sentiment. In previous year, the BDO prices increase to some degree and the downstream demand is high when entering September. As a result, part of players will still hold great expectations on BDO market. However, other players think the downstream demand will be affected by the environment protection supervision.

The supply-demand is the key factor to the BDO prices. The downstream demand will be flat, but many factories will be willing to provide the offers. In the short term, the supply-demand in BDO market will be unstable. The downstream demand will be up in October. The players should pay attention on the operating rate. At present, the BDO also will be effected by the players’ sentiments. Up to September 18, the BDO operating rate was 62%. The output increased 100kt than that in last year. The overall supply was sufficient. It is predicted that the BDO price will be hard to increase greatly this year.