BDO: Strong downstream demand, price exceeded 30,000 yuan

1,4-Butanediol Market Price Trend in 20211,4-Butanediol Market Price Trend in 2021

In 2021, driven by the demand of the downstream industry chain, the 1,4-butanediol (BDO) market will generally be in a state of tight supply, and the price increase will be alarming
.

According to the statistics of Chemical Industry Online, the price of BDO at the beginning of 2021 was about 12,600 yuan (ton price, the same below), and by the end of the year, it had risen to about 31,000 yuan, an increase of 147%, ranking second in the increase list

Presenting three main waves

Presenting three main rising wavesPresenting three main rising waves

In 2021, the domestic BDO market will be affected by multiple favorable factors such as shortage of supply, strong demand, and cost support
.

The overall market is mainly manifested as three main waves

The first wave of the main rising wave, soaring and plummeting
.

From the beginning of 2021 to the end of June, the average BDO market price climbed from 12,600 yuan to a high of 31,000 yuan during the year, and then plummeted to 16,400 yuan, with a maximum increase of 146.

The second wave of the main rising wave, soaring and fine-tuning
.

From the beginning of July to the beginning of September, the spot in the BDO market tightened, and the price rose rapidly, from 16,400 yuan to 30,300 yuan, and then back to 27,650 yuan, with a maximum increase of 84.

The third wave is the main uptrend, with a slight unilateral rise
.

From the beginning of September to the end of the year, driven by the tight supply and the peak sales season, the BDO market ushered in the third wave of rising prices during the year, rising from RMB 27,650 to RMB 30,830, an increase of 11.

　　Strong downstream demand pushes up

Strong downstream demand pushes up Strong downstream demand pushes up

　　Yang Heng, an analyst at the Speedy Consulting Research Institute, believes that the strong growth in the downstream spandex field is one of the important factors for the price of BDO to maintain a high level
.

The traditional downstream PTMEG-spandex industry chain maintains a high operating rate and demand continues to be strong, while the existing domestic production capacity remains stable for the time being.

　　At the same time, the National Development and Reform Commission and the Ministry of Ecology and Environment recently issued the "Opinions on Further Strengthening the Control of Plastic Pollution", which clarified the time point for banning plastics and limiting plastics
.

The downstream product of BDO, polybutylene adipic acid/terephthalate (PBAT), is the main raw material for biodegradable plastic films.

　　The superimposed upstream calcium carbide industry chain is affected by the "double control" of energy consumption, the price rises rapidly, the support on the cost side is strong, and the periodic maintenance load on the supply side is reduced, the BDO market has formed a tight supply situation, and jointly pushed the price to a record high
.

　　It is expected that the prosperity will continue to rise

It is expected that the prosperity will continue to rise.
It is expected that the prosperity will continue to rise.

　　"In the next five years, the terminal consumption of BDO's downstream products PBAT, PTMEG and γ-butyrolactone (GBL) will grow rapidly, especially the explosive growth of PBAT will greatly stimulate the demand for BDO, and the industry will enter a booming cycle
.

"Shenwan Hongyuan Securities analyst Li Nanzhu believes that China has intensively introduced a number of plastic restriction policies in recent years to promote the gradual replacement of degradable plastics for traditional plastics

　　In terms of demand for spandex, as the earliest developed and most widely used elastic fiber with the most mature production technology, its penetration rate in the textile field continues to increase
.
PTMEG downstream of BDO is mainly used in spandex production
.
By 2025, the demand for spandex is expected to reach 1.
05 million tons/year, and the demand for BDO will exceed 1 million tons/year
.

　　GBL is another important downstream of BDO
.
GBL can be widely used in lithium batteries, fine chemicals, medicine and other fields
.
With the high prosperity of lithium battery, it is expected that the compound growth rate of GBL will reach 15% in the next 6 years
.

　　Taking into account the main downstream, it is estimated that the apparent consumption of BDO in China in 2025 will be 4.
47 million tons/year
.

　　On the other hand, the total domestic BDO production capacity is 2.
34 million tons/year from 2020 to 2021
.
Although many domestic companies have launched a total capacity expansion plan of nearly 6 million tons per year in 2021, given that the BDO expansion cycle is about 2 years, it is expected that no new production capacity will be put into operation in the first half of 2022, and the production capacity will gradually enter the second half of the year
.
For example, Wanhua Chemical's 100,000 tons/year, Xinjiang Meike's 100,000 tons/year, Wuheng Chemical's 100,000 tons/year, and Inner Mongolia Dongyuan's 200,000 tons/year have been announced.
These four new production capacity will have to wait until 2022.
It will be gradually put on the market in the second half of the year
.

　　In addition, the new production capacity planned by BDO is still dominated by the acetylenic aldehyde method, of which the calcium carbide route accounts for the absolute majority
.
Considering that in the context of carbon neutrality, the "dual control" policy of energy consumption will not be relaxed, the shortage of calcium carbide and the relatively strict approval of BDO projects in China, so the actual production progress is likely to be lower than expected
.

　　On the whole, the mismatch between the growth rate of BDO production capacity and the growth rate of downstream demand will drive the BDO boom to continue to rise
.