Price Trend

In May 2019, the domestic BDO market continued to be weak and rigid. According to the sample data monitored by business associations, the BDO price was 9064 yuan/ton at the beginning of the month, and 8900 yuan/ton at the end of the month, with a decrease of 1.81% in the month. Prices fell by 24.48% over the same period last year.

II. Market Analysis

Products: In May, the domestic BDO market continued to be weak and rigid. At the end of April and the beginning of May, the pre-maintenance plants were restarted one after another, while the short-term shutdown and maintenance of the BDO plant in Meizhou Bay, Fujian Province, during May 1, resulted in a relatively stable overall start-up load. In mid-January, Xinjiang Tianye BDO plant routine parking overhaul is expected to reduce the supply of goods in Xinjiang for about 20 days; downstream Yizheng Chemical Fiber PBT plant has been put into operation successfully, but considering the weak market of PBT, will adopt the “stop old and open new” mode, the overall demand for BDO growth is not obvious. In late January, due to rising raw material prices and serious cost inversion, some factories raised spot offer, but downstream demand continued to be depressed, limited digestibility, strong resistance to high prices. At the same time, due to cost pressure, Kaixiang PBT plant will stop, the demand for self-use BDO will decrease, and the market supply may increase. Under the pressure of supply and demand, middlemen follow up cautiously, keep the pace of shipment, and negotiate with the market. Although the long-rumored new BDO device failed to be put into operation this month, it has had a certain impact on the market mentality. At present, the favorable market support is not obvious and the rising power is insufficient. The focus is on whether the new PBT device in Tunhe, Lanshan, Xinjiang can be put into operation normally and whether the PBT device other than Kaixiang can be operated under normal pressure. In June, the domestic BDO market will still be weak and stable under the supply-demand pull-saw game, focusing specifically on device dynamics and downstream PBT demand.

Industry chain: raw materials: methanol: northwest methanol market rose this month, most of the shipments in Inner Mongolia this month were purchased by traders, due to the news of olefin restart in Jiutai and Datang, which brought some support. Guanzhong’s overall shipment is good this month. At the end of the month, due to a large number of orders not issued, the price was lowered. Although the market was still rising this month, there was no substantial increase in downstream demand in Lianghu, East China and the local market. In the future, the market has little chance to rise sharply, mainly by shocks. Calcium carbide: Domestic downstream PVC repair enterprises will start in early June, but the rest of the PVC manufacturers will be repaired soon, calcium carbide demand growth is limited, upstream active shipment. On the upstream, the price of orchid charcoal is high, and the profit of calcium carbide is compressed. Under the constant pressure of the market, the price of calcium carbide will be lower next month.

Industry: According to the price monitoring of business associations, in May 2019, there were 21 commodities rising annually in the chemical sector, of which 9 commodities increased by more than 5%, accounting for 12.2% of the monitored commodities in the sector. The top three commodities were epichlorohydrin (11.73%), nitric acid (9.51%) and butadiene (9.15%). There are 48 kinds of products with a decline of more than 5%, accounting for 31.1% of the monitored products in this sector. The products with the first three declines are hydrochloric acid (-60.56%), sulfuric acid (-42.25%) and TDI (-26.21%). This month’s average rise and fall was -3.9%.

3. Future Market Forecast

The domestic BDO market is stable and the supply of spot goods is abundant. However, due to the large environmental impact downstream, it is difficult to increase the overall demand, so it is more difficult to enter the market to counter the price and make up for the warehouse at the lowest price. Although the factory offer is firm, but based on the contradiction between downstream demand and supply and demand, the pull-up appears to be “more than one’s heart but less than one’s strength”. At present, the main focus of the market is in the downstream PBT industry. Whether it can produce under pressure is the key to the trend of BDO. On the whole, the cost support is not strong. The market news is not clear yet, and the good support is scarce. Under the situation of unbalanced supply and demand, is BDO Factory Limited production and guaranteed price or continue production to let it go down? These are all unknowns. In view of the uncertain information released by the market, BDO analysts of business associations expect that the operators dare not rush to operate, stable prices are still the mainstream, and the domestic BDO market is weak and stable in the short term, paying particular attention to the downstream PBT demand.