Price trend
According to the SunSirs’ commodity market analysis system, the domestic BDO market declined. From July 1 to 31, BDO prices fell from 8,735 RMB/ton to 8,400 RMB/ton, a 3.84% drop over the period and a 5.92% year-on-year decline.
Analysis review
At the beginning of the month, the domestic BDO market experienced a period of stagnation after a surge. Restarted production capacity outstripped maintenance capacity, significantly increasing supply and weakening supply-side support. Meanwhile, demand from downstream industries shrank, significantly outstripping demand, exacerbating wait-and-see sentiment within the market.
In the first ten days of the month, supply remained ample. While demand from downstream industries increased, supply still outstripped demand, exacerbating supply-demand pressures. This led to a strong wait-and-see attitude among traders and limited spot trading. Amidst the supply-demand tussle, the domestic BDO market remained stable.
In mid-month, some plants restarted, increasing supply. However, operating rates in key downstream industries declined, reducing raw material consumption, increasing supply-demand pressures, and weakening the domestic BDO market.
Towards the end of the month, domestic BDO supply increased. However, operating rates in key downstream industries declined, and raw material consumption continued to decline, exacerbating the supply-demand imbalance. Traders adopted a sell-off mentality, dragging the market's center downward.
On the supply side: Lanshan Tunhe's Phase II and III plants were shut down for maintenance, while Xinjiang Xinye's plants had restarted. Other plants were operating stably, leading to continued increases in industry supply. There was no positive support on the supply side. BDO supply had negative affect.
Statistics on maintenance operations at some production companies:
|
Regions |
Device dynamics |
|
Xinjiang Lanshan Tunhe |
The first phase will be parked on August 27, 2024. The second and third phases will be operated stably, and the maintenance will be carried out for one month in late July |
|
Shaanxi Heimao |
The load is 50%, and it is planned to be overhauled for 20 days near August 3 |
|
Xinjiang Meike |
The third phase of the plant is stopped, and the first, second, fourth and fifth phases are operating normally |
|
Xinjiang Xinye |
Stable operation |
|
Inner Mongolia Junzheng |
The load is 70% |
|
Inner Mongolia Dongjing Biotechnology |
In the first phase of parking, the load of the second phase is 70% |
|
Sichuan Yongying, |
The starting load of the plant is 50% |
|
Inner Mongolia Huaheng |
Two sets of devices operate stably |
|
Sinopec Great Wall Energy |
Two sets of BDO units with a capacity of 100,000 tons/year are currently operating stably |
On the cost side, the domestic calcium carbide market remained largely stable with minor fluctuations. Unstable production capacity led to reduced supply, but a temporary recovery in demand had accelerated the depletion of unloaded trucks. Regarding methanol, the domestic methanol market had seen some recovery. As of 10:00 AM on July 31st, the Taicang price of methanol was 2,410 RMB/ton. The fluctuations in calcium carbide and methanol had a mixed impact on BDO costs.
On the demand side, downstream PTMEG, GBL-NMP, and PBAT industries experienced reduced production capacity, while PBT and TPU production increased. However, overall demand-side production capacity declined, and raw material consumption continued to decline, exacerbating the imbalance in the industry's supply and demand structure. Furthermore, the traditional off-season effect had weakened end-user demand. Under pressure from supply and demand, some downstream end-user industries, such as THF, PBT, GBL-NMP, and spandex, had seen declining prices, shrinking profit margins, and in turn, severely suppressing raw material prices. BDO demand had negative impact for the market.
Future outlook:
Supply continues to significantly outstrip demand, exacerbating the supply-demand imbalance. Furthermore, losses in downstream industries are putting severe downward pressure on raw material prices. The market lacks positive support. BDO analysts of SunSirs predict that the domestic BDO market may continue to weaken.
If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.
