PBAT and other downstream production cuts, and the price of BDO fell again, approaching 17,000 yuan!

Introduction: In June, the domestic BDO market continued its downward trend.
The current main market-East China, negotiated prices at 17,200-17,600 yuan / ton, basically the same as the market price on the eve of the Spring Festival in 2021
.

Lead: Lead: June domestic BDO market decline continues, the current main market - the price in East China to discuss 17200-17600 yuan / ton flat on the eve of the Spring Festival market price in 2021
.

The change in the supply-demand relationship in the second half of 2020, and the release of the news about the new planned production capacity of biodegradable plastics, which is strongly supported by the national policy, is good for the market mentality and supports the BDO market soaring to a historical high
.

As the supply remains high and the end industry has limited ability to digest high-priced raw materials, many downstream industries are forced to reduce production burdens to reduce cost pressures , resulting in a gradual imbalance between supply and demand

The change in the supply-demand relationship in the second half of 2020, and the release of the news about the new planned production capacity of biodegradable plastics, which is strongly supported by the national policy, is good for the market mentality and supports the BDO market soaring to a historical high

The current market price is still lower than the downstream psychological expectations, and the demand side enters the market to lower prices.

Soaring in the first quarter, continuing to decline in the second quarter, soaring in the first quarter, and continuing to decline in the second quarter

Figure 1 Domestic BDO market price trend chart in 2021

Figure 1 Domestic BDO market price trend chart in 2021

As of now, the domestic BDO market in 2021 can basically be divided into two stages:

As of now, the domestic BDO market in 2021 can basically be divided into two stages:

Slow increase in the first quarter → skyrocketing (price: 12600→31000→29350, unit: yuan/ton, the overall increase is 132.
94%);

Slow increase in the first quarter → skyrocketing (price: 12600→31000→29350, unit: yuan/ton, the overall increase is 132.
94%);

Slow decline in the second quarter→continuous decline (price: 29200→17400, unit: yuan/ton, a decrease of 40.
4%)
.

Slow decline in the second quarter→continuous decline (price: 29200→17400, unit: yuan/ton, a decrease of 40.
4%)
.

The BDO market in each month of the second quarter:

The BDO market in each month of the second quarter:

From 29,200 yuan/ton at the beginning of the month to 24,500 yuan/ton at the end of the month in April, a decrease of 4700 yuan/ton;

From 29,200 yuan/ton at the beginning of the month to 24,500 yuan/ton at the end of the month in April, a decrease of 4700 yuan/ton;

From 24,250 yuan/ton at the beginning of the month in May to 19,200 yuan/ton, a decrease of 5,050 yuan/ton;

From 24,250 yuan/ton at the beginning of the month in May to 19,200 yuan/ton, a decrease of 5,050 yuan/ton;

From 19,000 yuan/ton at the beginning of the month in June to 17,400 yuan/ton on June 8, a decrease of 1,600 yuan/ton
.

From 19,000 yuan/ton at the beginning of the month in June to 17,400 yuan/ton on June 8, a decrease of 1,600 yuan/ton
.

The current price has basically returned to the level before the Spring Festival.
The main influencing factor is that the soaring market has caused the terminal to be unable to absorb high prices, and the downstream is reducing inventory and other negative production, resulting in another imbalance of supply and demand.
BDO manufacturers rationally trade and make profits downstream
.

The current price has basically returned to the level before the Spring Festival.
The main influencing factor is that the soaring market has caused the terminal to be unable to absorb high prices, and the downstream is reducing inventory and other negative production, resulting in another imbalance of supply and demand.
BDO manufacturers rationally trade and make profits downstream
.

Analysis of Supply and Demand

Analysis of Supply and Demand Side Analysis of Supply and Demand Side

Figure 2 Comparison of domestic BDO supply and demand in 2021

Figure 2 Comparison of domestic BDO supply and demand in 2021

Through the comparison of domestic BDO supply and demand in the above figure, the total supply of BDO from January to May 2021 is 716,800 tons, the demand is 689,600 tons, and the difference between supply and demand is 27,200 tons
.

Among them, from January to February, the demand was greater than the supply, which helped the factory to offer high prices, and prices continued to rise; while from March to March due to the high price of raw materials, the downstream industries other than PTMEG and PBAT reduced their operating loads, especially Many factories in the PBT industry chose to stop for maintenance due to inventory pressure.
The load was once reduced to less than 30%, and the supply began to become surplus, and BDO prices continued to decline

Through the comparison of domestic BDO supply and demand in the above figure, the total supply of BDO from January to May 2021 is 716,800 tons, the demand is 689,600 tons, and the difference between supply and demand is 27,200 tons

According to the historical experience of previous years, in order to alleviate inventory pressure, most BDO factories will limit production and insure prices

With the gradual loss of raw materials, the overall downstream construction in June increased.

July supply aspect: July supply aspect: Xinjiang Xinye plans to conduct maintenance from the 27th to August 18th, and Tunhe also has maintenance expectations, and the supply will be reduced compared with June; and the downstream PBAT industry will gradually increase production capacity Increase in volume and increase in demand

Outlook forecast: Outlook forecast: in the first quarter in short supply and factory control disk support BDO market high, the excess supply in the second quarter, downstream of the high resistance to strong urge BDO prices fell
.
However, with the gradual release of new production capacity in downstream industries in the second half of the year, BDO is likely to bottom out and rebound , but whether it can return to the high point near 30,000 yuan/ton in the middle of the year still depends on how the demand side increases and the factory's control efforts
.