Price Trend

In August 2019, the domestic BDO market rose first and then stabilized.  According to the sample data monitored by business associations, the price of BDO was 9280 yuan/ton at the beginning of the month, and 93600 yuan/ton at the end of the month, with an increase of 0.86% in the month. Prices fell by 18.30% over the same period last year.

II. Market Analysis

Product: This month, the domestic BDO market is frozen after a narrow increase. At the beginning of this month, the Kaixiang device for safety investigation due to Yima explosion parking in late July had not yet started, while the overhaul device restarted at the end of July had a low load, a low market start-up rate, factories took the opportunity to boost the market, and middlemen followed up to raise the offer. Although the trading focus rose, the downstream demand was still mainly just needed, and the increase was not significant. In mid-month, Shaanxi and Tianhua changed catalysts for short shutdown, Dongyuan shutdown maintenance, together with the alternate rise and fall of raw materials calcium carbide and methanol, the cost pressure is strong, and the factory still intends to boost the market, but the shutdown maintenance of Tunhe PBT plant, the main downstream PBT start-up rate dropped to about 50%; PTMEG as a whole started to maintain about 7-80%, the demand is limited, and the shutdown rate is about 50%. Slow digestion leads to the supply and demand game in the domestic BDO market, which is deadlocked. At the end of the month, raw material calcium carbide and methanol declined narrowly and cost support weakened. After the restart of Tianhua and Shaanhua, the load gradually increased, and the supply of goods increased. At the same time, the new production capacity of Black Cat was tested and the samples arrived at the market. The downstream market entry was cautious and warehouse replenishment was on demand. To a certain extent, the firm’s price-fixing mentality has been impacted, with stable offer and market stability as the main factors. From the current supply and demand side, there are still uncertainties about whether the new capacity can enter the market smoothly. When Dongyuan drives next month, it hasn’t heard about the planned overhaul of the equipment, and the supply may increase. Although it is about to enter the traditional peak season of Jinjiu, there is no spot atmosphere downstream, so it just needs to be purchased. In terms of price, the main stream of bulk water supply negotiations in East China is 8600-9000 yuan/ton, while that in South China is 8600-9000 yuan/ton. (Acceptance delivered)

In terms of installation, Shaanxi Ronghe BDO device with a capacity of 60,000 tons/year stopped on January 23. Due to the technical renovation of equipment, it is expected to start at the end of October.  Xinjiang Tianye plant, which has been routinely parked and repaired since mid-May, has only been in normal operation for a period of time. Other devices are tentatively scheduled to start after National Day.  Henan Kaixiang Yinyima Gasification Plant exploded and stopped for safety investigation on July 19. The restart time is uncertain. Shaanxi Bidio plant replaced catalyst on August 9 and restarted on August 13.  Sichuan Tianhua Phase II 60,000 tons/year plant changed catalyst on August 12 and started on August 17. The first phase of parking overhaul is under way. Inner Mongolia Dongyuan plant stopped for maintenance on August 13, and is expected to be around 25 days. Shaanxi Black Cat has added 60,000 tons/year capacity since its trial run on August 19. Hearing samples have arrived.

Industry chain: raw materials: methanol: methanol market in Northwest China rose first and then fell this month. Mainstream prices in Inner Mongolia rose to 1800 yuan/ton in the first ten days of January. Enterprises shipped smoothly. Most manufacturers stopped selling. Traders maintained a positive attitude toward the market. Their willingness to stock goods was obvious. Mainstream prices in Guanzhong rose to around 2000 yuan/ton. Most manufacturers parked and repaired. Enterprises supported by low supply supported the market and kept their stocks in good condition. Position level, steady downstream delivery. In late January, with the resumption of Xianyang, Weihua and other devices, combined with the weaker impact of the futures market, downstream and traders are more cautious about receiving goods. Mainstream prices in Northwest China have fallen somewhat. Currently, mainstream transactions in Inner Mongolia have fallen to 1605 yuan/ton, and mainstream prices in Guanzhong have fallen to 1550 yuan/ton. At present, the downstream market demand is weak, and the port inventory remains high.

Calcium carbide: This month, the domestic calcium carbide Market as a whole showed a downward trend, mainly affected by supply and demand game, regional price adjustment is obvious. Affected by road safety inspection in the early stage, transportation in Northwest China was under pressure. Under the pressure of high inventory, enterprises implemented preferential policies and factory prices continued to decline. In the middle and late ten days, downstream demand has increased, road security has slowed down compared with the earlier period, and enterprise shipments are smooth. Affected by address disasters, road transportation in Sichuan is hindered. Enterprises are actively purchasing in Northwest China to accelerate the consumption of inventory in Northwest China. Parts of Shandong Province are still affected by road security and transportation, and the arrival of calcium carbide is limited. But as a whole, the carbide downstream arrival is sufficient, and the procurement price of the industry as a whole shows a downward trend. Next month, as the National Day approaches, the policy impact of transportation and environmental protection will increase. Downstream overhaul, plant load start-up aggravate market expectations, the overall market supply is still sufficient, calcium carbide prices are expected to fall in mid-early September.

Downstream, Henan Kaixiang PBT device stopped on May 30, and the restart time is uncertain. Nantong Star PBT device stopped in early July for maintenance and restarted on August 16. The 60,000-ton/year PBT plant in Tunhe, Lanshan, Xinjiang stopped on August 9, and the restart time was uncertain. The PBT unit operates on two lines with a load of about 80%. The maintenance plan of Sanlong PTMEG plant in Hangzhou was delayed, and the load of other devices was about 7-8%.

Industry: According to the price monitoring of business associations, in August 2019, there were 37 commodities rising annually in the chemical sector, of which 15 commodities increased by more than 5%, accounting for 17.9% of the monitored commodities in the sector; the first three commodities were hydrogen peroxide (39.93%), acetic acid (20.90%) and butadiene (14.47%). There are 39 kinds of products with a decline of more than 5%, accounting for 15.5% of the monitored products in this sector. The products with the first three declines are yellow phosphorus (-27.58%), epichlorohydrin (-23.28%) and sulfur (-19.38%). This month’s average rise and fall was 0.03%.

3. Future Market Forecast

To sum up, in September, whether the new black cat production capacity will enter the market smoothly remains uncertain. Dongyuan started in early September and has not heard of the planned overhaul of other devices, and the spot supply may increase. Although it is about to enter the traditional peak season of Golden Ninth, there is no spot atmosphere downstream, and it still needs to be purchased mainly. Factory price-keeping intention still exists, supply and demand continue to play a game, business association BDO analysts expect that the domestic BDO market will continue to be weak and stable next month, and specific adjustments will follow the changes in market supply and demand.