According to the Commodity Market Analysis System of Shengyi Society, the domestic BDO market continued to weaken in September. From September 1st to 30th, the average price of BDO in China fell from 8171 yuan/ton to 7400 yuan/ton, with a price drop of 9.44% during the period and a year-on-year price drop of 33.25%.

Multiple sets of equipment maintenance, agent replacement, and load reduction have reduced the industry’s capacity utilization rate to just over 50%, resulting in a significant reduction in supply. After the BDO market price fell to a historical level, the industry suffered severe losses, and production enterprises focused on maintaining a stable market mentality. The overall downstream load of the terminal has increased, but after most factories restock at low prices, their short-term intention to purchase raw materials is not strong, and the domestic BDO market continues to be weak.

Supply side: In terms of equipment, 15 sets of BDO maintenance or replacement units will be installed in September, with a total production capacity of 1.714 million tons per year; Under the pressure of losses, some units were forced to shut down one after another. At the same time, some of the previously shut down units have not been restarted and new production capacity has not yet been put into operation, resulting in a significant decline in industry capacity utilization. The monthly BDO production has been reduced to the lowest point of the year, and the supply side has a certain advantage. The supplier’s price mentality has driven the contraction of the October cycle sales policy, limiting the market’s downward space. The supply side of BDO is affected by favorable factors.

On the cost side, raw material calcium carbide: As the holiday approaches, logistics pressure increases. Downstream stocking is active, but currently some enterprises have insufficient stocking, coupled with the instability of the supply side, the purchasing enthusiasm of various enterprises remains undiminished. The calcium carbide market continues to show positive news. In terms of methanol, the domestic methanol market was relatively strong in September, and the BDO cost deviated from the positive factors.

On the demand side, the main downstream PTMEG spandex industry chain has a relatively high monthly load, but other downstream loads are average, resulting in an overall reduction in raw material digestion. At the same time, most downstream industries have followed the resonance of raw materials downward, with profits in a loss state. They mainly follow up on the continuation of raw material contracts, and most of them carry out certain replenishment operations when raw material prices are low. Therefore, the intention to stock up before the National Day holiday is not strong, which suppresses the trend of raw materials. The demand side of BDO is affected by bearish factors.

In the future market forecast, there are plans to restart some facilities, and new production capacity is also expected to be put into operation in the near future, leading to an increase in market supply of goods. After the holiday, downstream storage and replenishment of essential goods are the main focus, and there is no significant breakthrough on the demand side. Business analyst BDO predicts that the domestic BDO market will continue to weaken and consolidate.