SunSirs: BDO Market Consolidates After Falling

Price trend  

According to the SunSirs commodity market analysis system, the average domestic BDO price fell from 7,914 yuan/ton to 7,714 yuan/ton from August 15th to 22nd, a 2.53% decrease over the period, an 11.33% month-over-month drop, and a 10.15% year-over-year drop. During the transition period between the old and new cycles, a wait-and-see attitude prevailed in the market, with active contract trading and few spot trading discussions. However, the persistent supply-demand imbalance has led to a cautious bearish outlook among traders, with holders negotiating at the lower end of the market, resulting in a weak and volatile market.

Analysis review

On the supply side, the Xinye Phase I unit restarted and then shut down again, while other units operates relatively stably. Overall industry supply increases, providing general support from the supply side. BDO supply provides negative factors for the market.

Statistics on the operational status of some production companies' units:

On the cost side, raw material calcium carbide: Manufacturers are experiencing smooth shipments. Downstream maintenance efforts are gradually resuming, resulting in a decrease in calcium carbide export sales and a shift in market inventory to downstream markets. Raw material methanol: The domestic methanol market remains weak. As of 3:00 PM on August 22, the reference price of methanol in Taicang was 2,315 yuan/ton. Raw materials calcium carbide and methanol are consolidating, BDO costs provide negative factors for the market.

On the demand side, operating rates for major downstream industries such as PTMEG, PBT, and PU slurries increases, while loads in other sectors remains stable. Despite a month-over-month increase in demand, the industry's supply-demand imbalance persist. Market conditions in many downstream industries continue to decline, with increasing cost pressures and continued resistance to high raw material prices. BDO demand provides negative factors for the market.

Future outlook:

While both supply and demand in the BDO market are increasing, the industry's imbalance persists, negatively impacting market sentiment. The BDO industry is currently experiencing continued losses, with suppliers hesitant to sell to maintain a stable market. Furthermore, with the traditional peak season approaching, downstream inquiries are improving, leading to expectations of pre-stocking. BDO analysts at SunSirs predict that the domestic BDO market is expected to stop falling and stabilize.

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