According to the Commodity Market Analysis System of Shengyi Society, from May 12th to 16th, the average price of BDO in China remained at 7950 yuan/ton, with a month on month increase of 0.25% and a year-on-year decrease of 11.81%. With the restart of some facilities and the increase in industry capacity utilization, supply side support has weakened, exacerbating the wait-and-see sentiment in the market. Downstream urgent orders are being followed up, and the transmission of industrial chain costs is not smooth, suppressing the trend of pressure. Supply and demand negotiation game, BDO market situation is operating in a wait-and-see manner.
On the supply side, although some facilities in Xinjiang have been shut down, the early maintenance equipment has restarted and increased production, resulting in an industry capacity utilization rate of over 50%. The positive support from the supply side has weakened, and the wait-and-see sentiment in the market has increased. But Xinhua’s equipment has a maintenance plan in mid to late May, and the supply side support may improve again. The supply side of BDO is affected by negative factors.
On the cost side, raw material calcium carbide: The domestic calcium carbide market is operating steadily, but production enterprises are experiencing production restrictions under the pressure of electricity costs, leading to unstable supply. The domestic methanol market has been fluctuating and consolidating. As of 10:00 am on May 16th, the domestic methanol Taicang price was 2426 yuan/ton. The price adjustment and operation of raw materials such as calcium carbide and methanol have a mixed impact on the cost of BDO.
On the demand side, the operating load of downstream PTMEG and PU slurries has increased, but the capacity utilization rate of PBT and TPU industries has decreased, resulting in an overall increase in raw material consumption, but not as much as the supply side increment, leading to an increase in supply and demand pressure. Under the negative impact of insufficient follow-up on terminal demand in multiple downstream industries such as PTMEG, PBT, GBL-NMP, PBAT, market prices have fluctuated at low levels, and industry profit margins have been compressed. Therefore, there is a strong bargaining sentiment towards raw materials. The demand side of BDO is affected by bearish factors.
Market forecast: With an increase in maintenance equipment, there will be more favorable support from the supply side, and the supply side will maintain a stable market mentality. Downstream maintenance requires follow-up, and under cost pressure, raw material prices are severely suppressed. Business analyst BDO predicts that the domestic BDO market has limited volatility.