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SunSirs: BDO Market Still Sees No Improvement Due to Low Operating Rate

February 28 2020 11:31:57     SunSirs (John)

Price trend

The domestic BDO market is weak. According to sample data monitored by SunSirs, as of February 27, the average domestic BDO market price was reported at 9,680 RMB/ton, and the price fell 1.18% month-on-month and rose 2.84% year-on-year.


Analysis review   


The domestic BDO market is running light. The start-up of the device is low. Similarly, the downstream load is not high, showing the illusion of both supply and demand. In fact, the BDO inventory is under pressure and the manufacturers have shipping mentality. However, the downstream cargo receiving capacity is not good, the actual order trading is weak, and a small amount of low-priced transactions are heard. The mentality of the supply and demand sides is divided, the supply side is more stable, the demand side is more bearish, the supply and demand game is tugging, and the industry is multi-dimensional and stable, waiting for more information.

In terms of market, the BDO market in South China waited and see. The on-site inventory is under pressure, the downstream load is low, and the consumption capacity is very weak. Supported by the shipping mentality of some manufacturers, there are a few low-price negotiations, and the overall focus is on stability. The BDO market in East China consolidated. At present, the inventory in the market is still high, downstream demand continues to be weak, and spot shipments are difficult. It is heard that low-price transactions have been held, but the overall situation remains stable.

Industrial chain: 

In terms of raw materials, the methanol market was narrowly sorted, and the trading atmosphere was good. The mainstream price in Inner Mongolia has stabilized to 1,600-1,650 RMB/ton of cash, mainly for olefins. In Guanzhong, the main exchange rate is maintained at 1,650-1,700 RMB/ton, and the contract is mainly executed in the second half of the week. The latest price of Ningxia this week is 1,650 RMB/ton, and the spot exchange rate is normal. The negotiation price of the main olefin plant in Xinjiang is around 1,640 RMB/ton.

The domestic calcium carbide market as a whole is operating steadily, and manufacturers are actively shipping. The current mainstream ex-factory price in Wuhai is 2,700-2,750 RMB/ton. It is now known that there will be a 50 RMB/ton reduction in North China, which will increase the overall bearish mentality of the market. At present, downstream demand for calcium carbide has not recovered, demand is weak, and the overall trend is weak and difficult to change. It is expected that the market price of calcium carbide will decrease.


Market outlook

From the current point of view, in order to promote reforms, the supply side has a clear mentality of stabilizing the market; downstream to reduce cost pressures, bearish expectations are increasing. The demand in the middle and downstream is light, and there is no substantial trading for reference. BDO analysts of Business Club predict that the short-term domestic BDO market will be mainly stable, focusing on downstream construction and actual order transactions.


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