The BDO market is even worse after the expiration

The BDO market is even worse when the dumping measures expire

the BDO market is even worse when the dumping measures expire

December 25, 2014

[China paint information] "on December 10, the Ministry of Commerce issued an announcement that 1,4-butanediol (BDO) has been implemented for five years Anti dumping measures are coming to an end. From December 25, the anti-dumping duty on imported 1,4-butanediol originating in Arabia and Taiwan, China will be terminated. This news will add to the already weak mainland market. BDO will continue to decline in the current situation of the chemical market. " Said Li Jun, general manager of Shandong Petrochemical Economic and trade group

new capacity is facing release

with the continuous construction and expansion of the capacity of domestic BDO manufacturers in recent years, the total capacity in 2014 will reach 1.749 million tons, of which the effective capacity is about 1.4 million tons. In 2009, the domestic production capacity was only more than 400000 tons. In just five years, the domestic BDO production capacity expanded to four times the original. In particular, the period from 2012 to 2014 is an important stage for the substantial increase of BDO production capacity in Chinese Mainland, with an annual growth rate of up to 66%

the most direct impact of overcapacity is reflected in market prices. This year, the domestic BDO market has experienced a high-grade "roller coaster" of ups and downs. Affected by the rapid release of domestic supply capacity, BDO prices fell in a waterfall, and BDO fell to a record low at the end of June. Manufacturers stopped the price decline by limiting production and guaranteeing prices. The price rebounded narrowly in early July. However, in October, the supply gradually increased, and the price fell. In addition, the expected release of production capacity at the end of the year still existed, and the price fell. Therefore, market participants also increased their bearish mentality and actively shipped. As of December 19, BDO bulk water supply offered 9600-9800 yuan (ton price, the same below) for acceptance

"except for maleic anhydride method, the utilization rate of the device is less than 60% at present. The newly built 100000 ton/year BDO device in Tunhe, Lanshan, Xinjiang is expected to be put into operation in the near future. The supply side capacity will be released again at the end of 2014 or early 2015, and nearly 10000 tons of new goods will be added every month. If it enters the market, there will be a new round of decline in domestic BDO."

end of anti-dumping measures

China's BDO market, where anti-dumping measures are about to end, is no longer a situation in which manufacturers were single and dependent on imported sources in 2009. Overseas sources of goods that are no longer subject to anti-dumping duties will certainly have an impact on the domestic market, but the exact impact is not yet clear

"from the current domestic market and import volume, the price of BDO apron in East China is 9600 ~ 9800 yuan, while the average import price is 1971 dollars. The price of imported goods is not particularly advantageous in China at present.", Li Jun said. However, no longer imposing anti-dumping duties on products originating in Arabia and Taiwan, China may open up room for price reduction for imported goods

and 2. Poor activity. At the same time, domestic manufacturers have also set their sights on overseas markets. Since June, China's BDO exports have increased significantly, with monthly exports of more than 1000 tons

"China's BDO export large tepex inlay thickness increased by 0.5mm. In addition to the force majeure factors of foreign devices, the output increased due to the new production capacity of some production enterprises, and the production enterprises turned to develop the export market of plastic parts with higher precision. This will also be a new way for enterprises to reduce the pressure on production and marketing in the future." Li Jun said

the upstream and downstream continued to weaken

affected by the continuous decline of crude oil prices, olefin enterprises' shipments were poor, most inventories were high, prices continued to decline, and profits continued to be compressed, indirectly affecting the operation of China's methanol to olefin enterprises. Formaldehyde is in the off-season of demand, the liquefied gas market is falling, the demand for MTBE is declining, the performance of acetic acid is general, the traditional downstream demand is even worse, and the aftermarket is mostly bearish

the maleic anhydride market frequently shows low-end prices under the continuous attack of upstream raw materials. The mentality of the industry is more confused, and no one can answer where the bottom is. In the later stage of maleic anhydride market, it is difficult for salt fish to turn over

at the same time, the sluggish demand weakened the upward momentum of BDO market. Although the demand in the downstream field of BDO in China has increased year by year, the release rate of production capacity compared with the supply side is still slow, and the development of consumption channels is limited under the high subsidies and decline mechanism. Polybutylene terephthalate (PBT), tetrahydrofuran (THF), polytetramethylene ether glycol (pt-meg) γ- Butyrolactone (GBL) and other products are in a relatively weak market situation, which is weak to drive BDO