According to the Commodity Market Analysis System of Shengyi Society, the domestic BDO market experienced a significant decline in August. From August 1st to 28th, the average price of BDO in China fell from 8928 yuan/ton to 8314 yuan/ton, with a price drop of 6.88% during the period and a year-on-year price drop of 27.61%.
| Gamma-PGA (gamma polyglutamic acid) |
At the beginning of the month, some devices were shut down for maintenance and replacement, resulting in a decline in the overall operating rate of the industry. But the downstream industry load has also decreased, resulting in a reduction in the digestion of raw materials. Manufacturers holding goods are under pressure to ship, and negotiations for discounts on actual orders are underway to promote sales. The market center of gravity is fluctuating downward.
In mid month, the early maintenance equipment was restarted and operated at a reduced load, resulting in weakened supply side support. Although the downstream industry has also seen an increase in load, there is still pressure on supply and demand within the market. Industry players have a bearish attitude towards purchasing and selling, and negotiations are underway to offer discounts on spot orders. As a result, the domestic BDO market continues to decline.
At the end of the month, the focus of the domestic BDO market continued to decline, with an overall increase in industry operating rates and an increase in market supply. However, the overall load of downstream industries is average, and the supply-demand contradiction highlights the bearish mentality of industry players in terms of purchasing and sales, leading to a volatile downward trend in the market.
Supply side: The market supply of goods has increased significantly, and the new production capacity of the second phase of Xinye has been put into operation, with weak support from the supply side. The favorable factors for BDO supply have weakened.
On the cost side, raw material calcium carbide: With the obvious oversupply in the calcium carbide market, the factory price continues to decline, and the enthusiasm of enterprises to start production remains low. However, downstream demand is still in a decreasing stage, and market sentiment is sluggish. In terms of methanol, the domestic methanol market rebounded in August, and the impact of BDO costs was mixed.
On the demand side, there is no significant change in downstream industry load, maintaining the follow-up of essential orders, and severely suppressing spot prices. There is a lack of obvious positive factors on the supply and demand side of the market, and business operators have a bearish attitude towards purchasing and sales. The demand side of BDO is affected by bearish factors.
Future forecast: Currently, market prices are at a low level, industry losses are intensifying, and the supply side’s stable market mentality is the main factor, which may limit the downward space. Business analyst BDO predicts that the domestic BDO market will continue to operate weakly.
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