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Insight | Time: Jun 23 2021 2:26PM
BDO: coming turnaround season drives price to touch bottom
 
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Price of BDO curved a deep “∧-shape” tendency in the first half of 2021: BDO price surged after the Lunar Chinese New Year holiday with strong demand, supply crunch outside China due to unit issue and speculative mindset on the market, soared by 143% by early-Mar, touching periodical peak, but kept falling thereafter, especially rapidly in Apr with decrement at around 47%, which was close to the level at the beginning of 2021.


Supply is expected to decrease: after price plunged, the news that some large BDO plants are scheduled to have turnaround in Q3 inject confidence into the market. Blue Ridge Tunhe, Xinjiang Xinye, Xinjiang Markor, Sinopec Great Wall all intend to have yearly maintenance in Q3, which will cover 0.56 million tons/year of capacity and account for near 26% of total capacity nationally. 


Demand grows: demand improved stably. Operating rate of PBT plants has increased to near 70% now, up by around 40 percentage points compared with Apr, and PTMEG plants almost ran at full capacity. That meant support from the major 2 sectors strengthened. In addition, demand from TPU and GBL market also grew. 

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Demand from PBAT market is a big variant for BDO industry. According to incomplete statistics, there are above 0.3 million tons/year of PBAT units, and their startup and release time should pay attention to the policy orientation and the conductivity of demand.


BDO market is expected to see obviously improving supply and demand fundamental in Q3. Mindset among players may change. Stocks of BDO are likely to recover under normal tempo. That means BDO price may be boosted to touch bottom. 

[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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