SunSirs: BDO Market Continued to Decline

https://www.chemnet.com   Aug 05,2024 SunSirs

Price trend

According to the Commodity Market Analysis System of SunSirs, from July 29th to August 2nd, the average price of BDO in China fell from 8,942 RMB/ton to 8,842 RMB/ton, with a price drop of 1.12% during the period and a year-on-year decline of 20.13%. Recently, some devices had been shut down for maintenance and replacement, resulting in a decline in the overall operating rate of the industry. But the downstream industry load had also decreased, resulting in a reduction in the digestion of raw materials. Manufacturers holding goods were under pressure to ship, and negotiations for discounts on actual orders were underway to promote sales. The market center of gravity was fluctuating downward.

Analysis review

On the supply side, in terms of equipment: Guotai Xinhua and Xinjiang Xinye stopped and replaced their vehicles, Inner Mongolia Dongjing Biotechnology had reduced its load operation, and the early maintenance equipment had not yet restarted. The industry's capacity utilization rate had decreased, and the supplier's intention to maintain prices was mainly focused. The supply of BDO had favorable factors for the market.

In terms of cost, raw material calcium carbide: there had been a significant increase in the supply of calcium carbide, and there had been a noticeable recovery and improvement in the operation of supporting calcium carbide equipment. At the same time, the early maintenance of the calcium carbide furnace had been completed, resulting in an overall increase in supply. The calcium carbide market was running abnormally low. Raw material methanol: The methanol market was experiencing a narrow consolidation. As of 10:00 am on August 2nd, the domestic methanol price at Taicang port was 2,510 RMB/ton. The cost impact for the BDO market was mixed.

On the demand side, although the downstream PTMEG industry had slightly increased with the increase of maintenance equipment load, and the TPU and PU slurry load in the polyurethane field had also increased, the second largest downstream PBT industry experienced a significant decline in load due to the impact of some equipment load reduction production. The demand side had reduced the amount of raw material digestion, and the supply-demand contradiction still existed. At the same time, downstream industries such as THF, PBT, GBL, PBAT were experiencing a decline in market conditions, leading to poor transmission of industrial chain costs and severe pressure on raw material prices. The demand side of BDO had bearish factors for the market.

Market outlook

After restarting some of the maintenance devices, the negative operation increased, leading to an increase in market supply. Downstream industries were experiencing both raising and lowering load, and overall demand had also increased. However, the supply-demand imbalance continued, putting pressure on manufacturers' shipments. SunSirs’ analyst BDO predicts that the domestic BDO market will mainly operate weakly.

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