News

–Reprinted to Biodegradable Materials Research Institute

According to Chemical Industry News, the process of the second quarter is almost halfway through. Under the influence of non-market factors, the overall demand for BDO downstream has turned weak, and the price of BDO has declined as a whole. Although there were many attempts to stabilize during the period, the market mentality was hit again and again.
The severe and complex environment and the interlaced small environment of long and short have also triggered extensive thinking in the BDO industry about the future market situation. With the continuous deployment of new production capacity in the future, the market sentiment has turned calm, and it is expected that the BDO market will return to the fundamentals. .

In the past year and a half, it can be said to be the highlight moment of the domestic BDO market. In the context of pro-cyclicality, BDO has handed over a perfect answer sheet. As the raw material side, it leads the whole industry chain. The highest price of BDO in 2021 is 32,000 yuan/ton. , the average price was 25,309.8 yuan / ton, an increase of 173.80% year-on-year, and the annual average profit margin reached 56.09%. The high price is inseparable from the support of fundamentals, as well as the support and enthusiasm of market confidence. Traditional downstream represented by spandex and emerging downstream demand represented by PBAT are well supported, and BDO presents a tight supply pattern; at the same time, the good prospects of downstream demand and the possibility of BDO arbitrage stimulate the enthusiasm of industry customers and traders to buy at low points. The above factors have contributed to the greater volatility of BDO prices in 2021.

Subtle changes will take place in the market in 2022, and the overall macroeconomic environment will be headed against the wind and the tide, and BDO will not be immune. Under the influence of non-market factors, the demand in the downstream industries of the industrial chain was collectively cold in the second quarter, the terminal consumption was insufficient, and the inventory in the industrial chain was accumulated. The overall start-up of GBL industry is sluggish, and there are still factory maintenance in May; the start-up of PTMEG, the main industry, has fallen to about 60%, and the start-up of spandex has not declined significantly, but the finished product inventory is once again close to a historical high; the start of PU pulp in the spot field once fell to about 30% ; Compared with the decline in downstream demand, the BDO industry has always started at a level of more than 60%, and the inventory continued to accumulate in the second quarter. In the second quarter, the supply and demand relationship of BDO changed, and the price went down all the way. Although there were many attempts to stabilize, it was not realized. As of May 12, the price of BDO bulk water in East China was 22,500-22,800 RMB/ton, down 5,900 RMB from the previous high. RMB/ton.

Long-term price falls reasonably, short-term market complexity still exists, waiting for the negative to be exhausted

In the second half of the year, the new production capacity of the BDO industry will start production. It is conservatively expected that more than 300,000 tons of new production capacity will be put into production in the second half of the year to fill the supply gap in the BDO market. Under the influence of this basic core factor, it is expected that the price of BDO will be long-term. Returning to a reasonable price range, the market’s expectations also affect the recent BDO market conditions, which are reflected in the calming of market sentiment, the strengthening of downstream negotiation and price pressure, and the weakening of confidence in bottom-hunting and positioning.

Although the long-term market is not optimistic, the complexity of the short-term BDO market still exists. The main disadvantage of the current BDO market is that the social inventory of the industrial chain needs to be consumed. Since before the May Day, the market has begun to expect an improvement in demand, especially in the spot market. During this period, there have been two times of support and stabilization, but in the period of time and time again Looking forward, market confidence has been continuously suppressed. Looking at the trend of other energy-related chemical products, some products rebounded after the May Day, mainly related to the support of the raw material side. BDO has always been less correlated with cost-side trends, and the current profit margin is still considerable. BDO lacks cost support. After the non-future market factors have bottomed out and improved, whether the long-suppressed market sentiment will usher in an outbreak, the industry is more cautious about this.

Judging from the actual supply and demand performance, the most difficult stage of the market has passed: the actual downstream consumption of BDO is still low, but it is not difficult to see from Figure 2 that the main industries PTMEG and PBT are recovering. , but the start of construction will not drop significantly, and the overall situation will continue to rise; the follow-up BDO factory also has maintenance plans, and the risk of social inventory continuing to accumulate is reduced.

From the perspective of market mentality, there are both long and short positions: online sales have been unpopular this week, downstream customers’ buying enthusiasm has decreased, and the price pressure is even stronger than in the previous period, gaining the upper hand in terms of bargaining power; this week, non-market factors are expected to improve. BDO’s downstream spot customers have short positions, which also gives the market a certain room for imagination, and BDO’s new production capacity often requires a certain commissioning period to start. Some industry players believe that BDO’s short-term market may still be promising.

Approaching the settlement cycle in May, there is limited room for profit under the pressure of trade market costs. Although the overall mentality is bearish, the actual trader has turned cautious and continues to pay attention to the dynamic guidance of online sales. There is still room for BDO to continue to fall, but in terms of time In other words, the key nodes in the market still appear from the end of May to the first half of June.