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BDO(1.4-Butanediol) Status in China
Apr 22, 2018

Last week, the supply of spot goods in domestic BDO(1.4-Butanediol) market was adequate as manufacturers that previously performed maintenance had resumed normal operation. It is reported that Markor Chemical's facilities had been restarted and its operating rate had risen to 70%. Fujian Meizhouwan Chlor-alkali Industry's BDO facilities had been restarted and spot goodsss from the manufacturer were available. Sinopec Great Wall Engergy and Chemicxal had ceased operation for turnaround, which was expected to last for about 30 days. A few manufacturers still have turnaround plans in April. For example, Chongqing Jianfeng Chemicals plans to shut down its facilities fro maintenance in late April. Though enquiries from downstream customers are increasing, more of them stayed on the sideline, only making purchase based on their rigit demands. Manufacturers received orders and delivered shipments as usual. Although offers from major producers remained stable, the actual transaction price was heard to decline slightly. The price remians stable on the surface, but in fact it declines. 

Based on the price of methanol and calcim carbide in Northwest China, it performed a rough calculation of the cost of BDO. Last week, BDO manufacturers in China saw a production cost. The price of raw material methanol remained stable, while that of butadiene and calcium carbide fell as a whole. Into 2018, the cost of raw materials provided limited support for BDO price. In the future, attention should be paid to the supply and demand on the market to forecast the price trend.

As for downstream sectors, many PTMEG manufacturers raise their prices. Whereas the spandex sector witnesses low price, with the overall market remaining weak. The market for PU resins for synthetic leather is sluggish. Some small manufactureres consumed limited BDO due to their low operating rate. The customers mostly make rigid demand-based purchase due to the mentality of buying when prices going up instead of coming down. At this point, though the dealers maintain their earlier offers, the actual negotiation price declines, mainly aming at the facilitating sale.

In short, the BDO price receives limited support from costs in April. The supply is adequate, while the demanddd remains moderate. Thus, it can be concluded that the market is at the turing point, and the price is expected to set on a downward trajectory.

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