Since the beginning of August, the domestic market for 1,4-butanediol (BDO) has seen a continued upward trend in price levels. As of August 27, the mainstream price for bulk BDO in the East China market stood at RMB8,150 per tonne, marking a 4.49% increase since early August.

From late August through early September, raw material costs are providing a floor for the BDO market, while both supply and demand are trending upward. Suppliers are likely to continue their strategy of holding prices firm to stabilize the market; however, the pass-through of costs along the industry chain remains limited. Consequently, BDO prices are expected to enter a consolidation and stabilization phase following the recent rise.

Raw Materials Provide a Price Floor

Recently, the prices of key BDO raw materials—calcium carbide and methanol—have trended upward amidst fluctuations. In the Northwest region, the weekly average prices for calcium carbide and methanol rose by RMB 30 and 111 respectively, pushing up BDO production costs.

Regarding calcium carbide, monthly power trading contracts for the major production hub of Western Inner Mongolia were finalized in early September. Power shortages in the region are expected to persist, placing constraints on production loads at calcium carbide plants. In early September, downstream maintenance at integrated facilities (producing calcium carbide, PVC, and BDO) is set to decrease, leading to higher internal consumption of calcium carbide and reduced volumes available for external sale; this creates upward momentum for calcium carbide prices. However, major downstream PVC producers are currently operating at a loss and demand is weak, making a sharp price surge unlikely; the market is expected to trade within the RmRMB 2,400–2,550 range

As for methanol, the upward trend in international oil prices throughout August drove a general rise in domestic methanol market prices. Recently, methanol prices in Ningxia and Inner Mongolia reached their highest levels of the first half of the year. With maintenance scheduled for methanol plants in early September and inventories likely remaining low, any price pullback is expected to be modest, with prices remaining elevated. However, given that downstream industries are generally incurring losses and cost pass-through along the chain is limited, the rise in raw material costs serves only to provide a price floor for BDO rather than driving a sustained increase in BDO prices.

Market Participants Maintain a Steady Stance

During the week of August 27, Xinjiang Tianzhichenye Chemical Co., Ltd. temporarily shut down its 130,000-ton/year BDO unit. While operating rates at other facilities fluctuated only slightly, overall BDO supply tightened again, causing the capacity utilization rate to drop to 49.3%. Auctions in the market saw high-price transactions, and suppliers remained firm on their pricing.

Regarding the schedule for unit maintenance and restarts: Sichuan Yongying New Materials Co., Ltd. plans a four-to-five-day maintenance shutdown for its 180,000-ton/year BDO unit starting August 31; Xinjiang Guotai Xinhua Chemical Co., Ltd. is set to restart its 100,000-ton/year unit at the end of August; Xinjiang Lanshan Tunhe Energy Co., Ltd. will restart its 100,000-ton/year unit in early September; and Xinjiang Xinye plans to restart its 70,000-ton/year unit in mid-September. The industry's capacity utilization rate is expected to rise above 50.7% in the first half of September, leading to increased market supply. Meanwhile, with the peak season approaching for various downstream industries, demand is also expected to rise gradually. With both supply and demand increasing, market fundamentals are supporting a steady outlook among industry participants。

BDO market supply is set to rise further in September, though the impact of new capacity on total supply remains limited; overall factory inventories are low, providing continued support from the supply side.

Moderate Recovery in Downstream Demand

As the traditional peak demand season approaches, downstream industries are poised for a moderate recovery.

Recently, the operating rate of the downstream PTMEG (polytetramethylene ether glycol) industry has remained high, ensuring stable consumption of BDO feedstock. The PTMEG industry's operating rate is expected to climb above 85% in September, leading to increased consumption of BDO raw materials. Regarding the downstream sector of polybutylene terephthalate (PBT), the operating rate of PBT producers in East China fell by 0.41 percentage points to 52.54% during the week of August 27, while the average weekly PBT price rose to 9,100 yuan—a high for the second half of the year. In terms of production facilities, Nantong Xingchen Synthetic Materials Co., Ltd.'s 60,000-ton/year PBT unit underwent maintenance from August 15 to September 15, and Lanshan Tunhe's 180,000-ton/year PBT unit restarted at the end of August; consequently, demand for the feedstock BDO is expected to increase in September.

Additionally, a recent surge in exports is set to effectively alleviate pressure on the domestic BDO market. Due to geopolitical tensions in the Middle East, operations at some overseas BDO production facilities have been disrupted, reducing outbound shipments and shifting a larger share of global trade toward domestic producers. In the first seven months of this year, my country's total BDO exports reached 179,110 tons—a year-on-year increase of 57.85%—surpassing the total export volume recorded for the full year of 2025. Looking ahead, as instability in the Middle East persists, domestic BDO export volumes are likely to remain high, providing a degree of support to the market.

In the short term, BDO prices are expected to stabilize following the recent rise, with spot prices for bulk BDO in East China likely fluctuating within the 8,200 to 8,500 yuan range. (Source: China Chemical Industry News)

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