There were only five working days after the return of the Spring Festival in 2021, and there were 4 auctions in total, which helped the domestic BDO market rise from 18,500 yuan/ton to the current price of 29,500 yuan/ton, with an average daily increase of 2,200 yuan/ton, and the increase reached 5,000 yuan/ton on just 23rd, setting a new historical high since 2010.
2010-2021 Domestic BDO market price trend chart
Looking at the domestic BDO market trend chart from 2010-2021, we can clearly see that the price of more than 20,000 yuan only appeared in 2010-2011, and the historical high at that time was 24,800 yuan/ton. The average annual price in the past decade has been around 12,800 yuan/ton, and it has been below the average price in the past seven years from May 2014 to 2020, and in 2021 the market once again crossed the average and reached a higher point. Among them, as of February 23, 2021, the average daily price was 15,538 yuan/ton, and the average price in February was 18,929 yuan/ton, an increase of 97.3% year-on-year.
What are the reasons for the BDO rise in 2021 so "booming"? Let the editor take you to sort it out.
Multi-factory inventory is low, traders hold limited supply
Except for Shanxi 3D 75,000 tons, Shaanxi Ronghe 60,000 tons, and Xinjiang Tianye's 180,000 tons production capacity has been in a state of parking for a long time, recently, BDO factories have been deducted from time to time or have short-term maintenance. For example, before the festival, two sets of 200,000 tons of Great Wall Energy's two sets of 200,000 tons of equipment were re-insured and only one set was restarted, Panjin Dalian's 150,000 tons of equipment fell to about 50%-60% due to raw material shortage in January, Xinjiang Xinye's 60,000 tons of production capacity was maintained from February 14 to February 20, and Inner Mongolia East was planned to replace the catalysis from February 20 to 26, and the overall operating rate was less than 70%. Since the previous orders and contracts have not been fully delivered, many factories mainly deliver these, and the inventory remains at a low level; the same is true for traders, with limited holdings and a clear intention to sell and wait for a rise, resulting in weak liquidity of spot goods in the market. At the same time, some foreign devices have reduced their load or closed due to various reasons, which has a great impact on the gap in domestic demand for imported goods.
has performed well on the demand side, but some of the costs are under pressure
1. In the second half of 2020, the main downstream PTEMG-spandex industry chain has been popular so far. In addition to Shanxi Sandi, Henan Hemei, which has been parking for a long time, and Yizheng Dalian, which was parked in the second half of 2020 due to old equipment, other factories have maintained high load operation, both BDO supporting facilities and external mining. However, due to excessive cost pressure, some external mining factories plan to suspend maintenance in March.
2. Some raw material production plants in the PBT industry were forced to stop or reduce production due to shortage of raw materials, and the overall start of construction remained at about 40%. It is reported that these factories still have some orders for downstream terminal customers that have not been delivered yet. It is expected that if the raw material supply is sufficient, there will still be a restart expectation.
3. The GBL industry is driven by the rapid rise in raw material BOD, and the market price is also rising at a high level, and most factories have no goods to deliver. However, due to raw material problems, the burden was cut passively.
4.TPU industry: Raw materials have risen sharply since the beginning of the year. Considering their own cost issues, some factories have raised their product prices, and the average factory equipment load is around 60%-70%. The resumption of work of downstream factories is earlier than in previous years and has gradually entered the market. The inventory has been at a low level after the initial consumption. The replenishment of stocks in the market has promoted the subsequent start of TPU.
5. The demand for new downstream PBAT also exploded at the end of 2020. Currently, some production capacity has been started and maintained at a high level. It has not been affected by high-priced raw materials yet, and it is still in the market to replenish its positions. The high price of
auctions has been constantly refreshed, and the middle and lower reaches are chasing the rise with a strong mentality of
Just after the Spring Festival, in just five working days, the domestic BDO market is intensively arranged with 4 auctions, and the bidding price ranges from 22,000 yuan to 30,550 yuan/ton, and the price difference between high and low reaches 8,550 yuan/ton, constantly setting new highs: On February 18, Henan Energy: 200 tons transactions were 22,000 yuan/ton. The transaction of 100 tons is 22,050 yuan/ton (received and delivered to the dispersed water) → On February 22, the transaction of 150 tons of Yanchang Petroleum was 29,300 yuan/ton (received and transferred from the dispersed water) → On February 23, the transaction of 100 tons of Yanchang Petroleum was 29,970 yuan/ton (received and transferred from the dispersed water) → On February 23, Henan Energy: The transaction of 200 tons is 30,500 yuan/ton, and the transaction of 200 tons is 30,550 yuan/ton (received and accepted and delivered to the dispersed water). With the announcement of the auction results again and again, practitioners of the entire BDO industry chain were shocked. Some BDO industry insiders who have been in the industry for more than ten years said that "live for a long time". Just as everyone was shocked and hotly discussed, the main downstream industry practitioners did not know how to quote the market for a while, and chose to close the market but not report it; while some mid- and downstream small investors panicked and the atmosphere of replenishment in the market increased sharply, which helped boost transaction prices.The domestic BDO market soared, with the mainstream market price rising to 29,500 yuan/ton on the 23rd, and moving towards the door of 30,000.
industry insiders can’t help but ask, after the holiday, the domestic BDO market jumped at a price of several thousand yuan per day. Can this upward trend continue?
The most fundamental influencing factor in the current sharp rise in the domestic BDO market is the support of the supply and demand pattern. The downstream terminals have to purchase even when facing high prices under the urgent need. However, if the market continues to jump sharply in the future, it will exceed the acceptable capacity of the demand side, and downstream terminal factories will be forced to reduce their burdens or stop. Therefore, at this time, the role of production enterprises in promoting the healthy development of the entire BDO industry must be reflected: increase the operating rate, increase the supply and reduce the supply and demand gap; strengthen the reasonable control of the auction model, and give some room for concessions to the demand side. If the market price in the future remains within a reasonable range, there is huge positive support on the supply side, and there is no large-scale new BDO production capacity entering the market in recent years, the downstream market entry bargaining power is weak, and the market voice is still in the hands of the factory. Therefore, Longzhong Information expects that the domestic BDO market will still rise in the short term, but the specific range needs to be paid attention to the degree of downstream acceptance.
The domestic BDO market soared, with the mainstream market price rising to 29,500 yuan/ton on the 23rd, and moving towards the door of 30,000.
industry insiders can’t help but ask, after the holiday, the domestic BDO market jumped at a price of several thousand yuan per day. Can this upward trend continue?
The most fundamental influencing factor in the current sharp rise in the domestic BDO market is the support of the supply and demand pattern. The downstream terminals have to purchase even when facing high prices under the urgent need. However, if the market continues to jump sharply in the future, it will exceed the acceptable capacity of the demand side, and downstream terminal factories will be forced to reduce their burdens or stop. Therefore, at this time, the role of production enterprises in promoting the healthy development of the entire BDO industry must be reflected: increase the operating rate, increase the supply and reduce the supply and demand gap; strengthen the reasonable control of the auction model, and give some room for concessions to the demand side. If the market price in the future remains within a reasonable range, there is huge positive support on the supply side, and there is no large-scale new BDO production capacity entering the market in recent years, the downstream market entry bargaining power is weak, and the market voice is still in the hands of the factory. Therefore, Longzhong Information expects that the domestic BDO market will still rise in the short term, but the specific range needs to be paid attention to the degree of downstream acceptance.
