SunSirs: The BDO Market Was Weaker

Price trend

According to the Commodity Market Analysis System of SunSirs, from July 14th to 18th, the average price of BDO in China remained at 8,735 RMB/ton, with a month on month increase of 3.64% and a year-on-year decrease of 2.94%. Partial devices were restarted, resulting in an increase in supply. However, the main downstream industries experienced a decline in production, resulting in a reduction in raw material digestion and an increase in supply and demand pressure. As a result, the domestic BDO market atmosphere was weaker.

Analysis review

On the supply side, Inner Mongolia Junzheng and Wuheng Chemical Phase II plants had been restarted one after another, while Xinjiang Xinye plant was shut down due to boiler problems, and there was no changes in the operation of other plants. The industry supply had increased, and the favorable factors for BDO supply had gradually weakened.

On the cost side, raw material calcium carbide: The domestic price of calcium carbide was stable, and the mainstream trade price in the Wuhai area was stable at 2,250 RMB/ton. Production enterprises had obvious destocking, and the market was stable and wait-and-see. The domestic methanol market was consolidating weakly. As of 3:00 pm on July 18th, the reference price for domestic methanol in Taicang was 2,380 RMB/ton. Raw materials such as calcium carbide and methanol were both showing a downward trend, and the cost of BDO was affected by unfavorable factors.

On the demand side, downstream PTMEG, PBT, and PBAT industries all experienced a decline in production, while other downstream loads did not show significant changes. The demand side reduced the amount of raw material digestion, and the supply and demand pressure in the BDO industry had intensified. At the same time, the sluggish performance of terminal demand dragged down the market of some downstream industries, intensifying the pressure of profit losses and increasing resistance to high raw material prices. The demand side of BDO was affected by bearish factors.

Market outlook

The supply of BDO market continued to increase, while the demand in downstream industries slightly decreased, and the supply-demand contradiction will intensify. Moreover, most downstream industries are losing money, and under cost pressure, there is a strong resistance to high prices, which will limit the trend of raw materials. SunSirs’ BDO analyst predicts that the domestic BDO market may weaken.

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