SunSirs: The BDO Market Was Consolidating Weakly

Price trend:

According to the commodity market analysis system of SunSirs, from December 8th to 12th, the domestic BDO price fell to 7,537 RMB/ton, a decrease of 0.39% during the period, a decrease of 1.15% month-on-month, and a decrease of 14.17% year-on-year. The domestic BDO market remained weak and stagnant. Both supply and demand decreased, and cost transmission was not smooth. The supply and demand game continued, maintaining contract order trading and spot transactions were sluggish.

Market Analysis

On the supply side, regarding plant operations, Sichuan Tianhua, Shaanxi Heimao, Lanshan Tunhe Phase III, and Chongqing Jianfeng plants are undergoing maintenance and refrigerant replacement, while other plants are operating relatively stably. Overall industry capacity utilization has declined, slightly strengthening supply-side support. The BDO supply side provides slight positive factors for the market.

Statistics on the operation of some production facilities:

Cost factors: Raw material calcium carbide: The domestic calcium carbide market remains stable at high levels, with smooth sales for producers and an overall tight supply. Raw material methanol: Domestic methanol prices decline weakly. As of 10:00 AM on December 5th, the reference price for methanol in Taicang was 2,110 RMB/ton. With rising calcium carbide prices and a weak methanol market, the cost impact on BDO is mixed.

On the demand side, the downstream PTMEG industry sees a decline in operating rates due to the maintenance shutdown of Tianhua's plant, while other downstream operations remain relatively stable, resulting in an overall decrease in consumption. Weak market conditions across many downstream industries hinder cost transmission, and there is a willingness to negotiate prices for raw materials. BDO demand was negative for the market.

Market Forecast:

Supply decreases while demand increases, potentially reducing supply-demand pressure; however, cost transmission within the supply chain is not smooth. Negotiations and bargaining between supply and demand have resulted in a stalemate in the market. SunSirs’ BDO analyst predicts that the domestic BDO market will primarily consolidate.

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